INFINERA CORP, 10-Q filed on 5/4/2015
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 28, 2015
Apr. 28, 2015
Document And Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Mar. 28, 2015 
 
Document Fiscal Year Focus
2015 
 
Document Fiscal Period Focus
Q1 
 
Trading Symbol
INFN 
 
Entity Registrant Name
INFINERA CORP 
 
Entity Central Index Key
0001138639 
 
Current Fiscal Year End Date
--12-26 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
129,624,376 
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Mar. 28, 2015
Dec. 27, 2014
Current assets:
 
 
Cash and cash equivalents
$ 118,623 
$ 86,495 
Short-term investments
215,080 
239,628 
Accounts receivable, net of allowance for doubtful accounts of $20 in 2015 and $38 in 2014
131,224 
154,596 
Inventory
157,195 
146,500 
Prepaid expenses and other current assets
23,112 
24,636 
Total current assets
645,234 
651,855 
Property, plant and equipment, net
82,661 
81,566 
Long-term investments
69,835 
59,233 
Cost-method investment
14,500 
14,500 
Long-term restricted cash
5,108 
5,460 
Other non-current assets
5,692 
5,402 
Total assets
823,030 
818,016 
Current liabilities:
 
 
Accounts payable
50,183 
61,533 
Accrued expenses
28,061 
26,441 
Accrued compensation and related benefits
24,406 
38,795 
Accrued warranty
11,453 
12,241 
Deferred revenue
36,757 
35,321 
Total current liabilities
150,860 
174,331 
Long-term debt, net
118,951 
116,894 
Accrued warranty, non-current
14,086 
14,799 
Deferred revenue, non-current
12,119 
10,758 
Other long-term liabilities
19,179 
19,327 
Commitments and contingencies (Note 14)
   
   
Stockholders’ equity:
 
 
Preferred stock, $0.001 par value Authorized shares – 25,000 and no shares issued and outstanding
Issued and outstanding shares – 129,094 as of March 28, 2015 and 126,160 as of December 27, 2014
129 
126 
Additional paid-in capital
1,090,676 
1,077,225 
Accumulated other comprehensive loss
(4,510)
(4,618)
Accumulated deficit
(578,460)
(590,826)
Total stockholders’ equity
507,835 
481,907 
Total liabilities and stockholders’ equity
$ 823,030 
$ 818,016 
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 28, 2015
Dec. 27, 2014
Statement of Financial Position [Abstract]
 
 
Net of allowance for doubtful accounts
$ 20 
$ 38 
Preferred stock, par value (in usd per share)
$ 0.001 
$ 0.001 
Preferred stock, shares authorized (in shares)
25,000,000 
25,000,000 
Preferred stock, shares issued (in shares)
Preferred stock, shares outstanding (in shares)
Common stock, par value (in usd per share)
$ 0.001 
$ 0.001 
Common stock, authorized shares (in shares)
500,000,000 
500,000,000 
Common stock, shares issued (in shares)
129,093,644 
126,160,000 
Common stock, shares outstanding (in shares)
129,093,644 
126,160,000 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 28, 2015
Mar. 29, 2014
Revenue:
 
 
Product
$ 160,843 
$ 124,242 
Services
26,019 
18,573 
Total revenue
186,862 
142,815 
Cost of revenue:
 
 
Cost of product
89,506 
78,438 
Cost of services
9,244 
5,971 
Total cost of revenue
98,750 
84,409 
Gross profit
88,112 
58,406 
Operating expenses:
 
 
Research and development
39,257 
29,346 
Sales and marketing
21,042 
17,862 
General and administrative
12,656 
12,254 
Total operating expenses
72,955 
59,462 
Income (loss) from operations
15,157 
(1,056)
Other income (expense), net:
 
 
Interest income
414 
336 
Interest expense
(2,890)
(2,677)
Other gain (loss), net
301 
(729)
Total other income (expense), net
(2,175)
(3,070)
Income (loss) before income taxes
12,982 
(4,126)
Provision for income taxes
616 
248 
Net income (loss)
$ 12,366 
$ (4,374)
Net income (loss) per common share:
 
 
Basic (in usd per share)
$ 0.10 
$ (0.04)
Diluted (in usd per share)
$ 0.09 
$ (0.04)
Weighted average shares used in computing net income (loss) per common share:
 
 
Basic weighted average common shares outstanding (in shares)
127,840 
121,352 
Diluted weighted average common shares outstanding (in shares)
137,304 
121,352 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 28, 2015
Mar. 29, 2014
Statement of Comprehensive Income [Abstract]
 
 
Net income (loss)
$ 12,366 
$ (4,374)
Other comprehensive income (loss):
 
 
Unrealized gain on all other available-for-sale investments
267 
50 
Foreign currency translation adjustment
(159)
244 
Tax related to available-for-sale investment
(20)
Net change in accumulated other comprehensive income
108 
274 
Comprehensive income (loss)
$ 12,474 
$ (4,100)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 28, 2015
Mar. 29, 2014
Cash Flows from Operating Activities:
 
 
Net income (loss)
$ 12,366 
$ (4,374)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
 
 
Depreciation and amortization
6,586 
6,314 
Amortization of debt discount and issuance costs
2,234 
2,020 
Amortization of premium on investments
954 
828 
Stock-based compensation expense
7,208 
6,672 
Other gain
(19)
(20)
Changes in assets and liabilities:
 
 
Accounts receivable
23,391 
(6,762)
Inventory
(12,103)
(3,354)
Prepaid expenses and other assets
1,141 
(3,797)
Accounts payable
(10,317)
(2,080)
Accrued liabilities and other expenses
(12,895)
(13,448)
Deferred revenue
2,797 
(909)
Accrued warranty
(1,501)
3,477 
Net cash provided by (used in) operating activities
19,842 
(15,433)
Cash Flows from Investing Activities:
 
 
Purchase of available-for-sale investments
(80,022)
(80,223)
Proceeds from sale of available-for-sale investments
2,001 
Proceeds from maturities of investments
91,280 
57,063 
Purchase of property and equipment
(7,367)
(5,608)
Change in restricted cash
352 
(479)
Net cash provided by (used in) investing activities
6,244 
(29,247)
Cash Flows from Financing Activities:
 
 
Proceeds from issuance of common stock
10,131 
7,054 
Minimum tax withholding paid on behalf of employees for net share settlement
(3,950)
(1,619)
Net cash provided by financing activities
6,181 
5,435 
Effect of exchange rate changes on cash
(139)
164 
Net change in cash and cash equivalents
32,128 
(39,081)
Cash and cash equivalents at beginning of period
86,495 
124,330 
Cash and cash equivalents at end of period
118,623 
85,249 
Supplemental disclosures of cash flow information:
 
 
Cash paid for income taxes, net of refunds
897 
303 
Supplemental schedule of non-cash financing activities:
 
 
Transfer of inventory to fixed assets
$ 1,403 
$ 603 
Basis of Presentation and Significant Accounting Policies
Basis of Presentation and Significant Accounting Policies
Basis of Presentation and Significant Accounting Policies
Infinera Corporation (the "Company") prepared its interim condensed consolidated financial statements that accompany these notes in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC"), consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2014.
The Company has made certain estimates, assumptions and judgments that can affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, as well as the reported amounts of revenue and expenses during the periods presented. Significant estimates, assumptions and judgments made by management include revenue recognition, stock-based compensation, inventory valuation, accrued warranty, fair value measurement of investments and accounting for income taxes. Other estimates, assumptions and judgments made by management include allowances for sales returns, allowances for doubtful accounts, useful life of property, plant and equipment, fair value measurement of the liability component of the convertible senior notes, other-than-temporary impairments and derivative instruments. Management believes that the estimates and judgments upon which they rely are reasonable based upon information available to them at the time that these estimates and judgments are made. To the extent there are material differences between these estimates and actual results, the Company’s consolidated financial statements will be affected.
The interim financial information is unaudited, but reflects all adjustments that are, in management’s opinion, necessary to provide a fair presentation of results for the interim periods presented. All adjustments are of a normal recurring nature. The Company reclassified certain amounts reported in previous periods to conform to the current presentation. This interim information should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2014.
There have been no material changes in the Company’s significant accounting policies for the three months ended March 28, 2015 as compared to those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2014.
To date, a few of the Company’s customers have accounted for a significant portion of its revenue.  For the three months ended March 28, 2015, two customers individually accounted for 18% and 16% of the Company’s total revenue, respectively. For the three months ended March 29, 2014, two customers individually accounted for 21% and 16% of the Company’s total revenue, respectively.
Recent Accounting Pronouncements
Recent Accounting Pronouncements
Recent Accounting Pronouncements
In February 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2015-02, "Consolidation (Topic 10): Amendments to the Consolidation Analysis" (“ASU 2015-02”). ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. In accordance with ASU 2015-02, all legal entities are subject to reevaluation under the revised consolidation model. ASU 2015-02 will be effective for the Company in its first quarter of fiscal 2016. The Company is currently evaluating the impact of the pending adoption of ASU 2015-02 on its consolidated financial statements.
In January 2015, the FASB issued Accounting Standards Update 2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items" (“ASU 2015-01”). ASU 2015-01 eliminates the concept of an extraordinary item from GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 will be effective for the Company in its first quarter of fiscal 2017. The adoption of ASU 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements.
In June 2014, the FASB issued Accounting Standards Update No. 2014-12, "Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period" ("ASU 2014-12"). ASU 2014-12 requires that a performance target that affects vesting and could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Accounting Standard Codification ("ASC") 718, "Compensation—Stock Compensation" ("ASC 718"), as it relates to such awards. ASU 2014-12 will be effective for the Company's first quarter of fiscal 2017 with early adoption permitted using either of two methods: (i) prospective to all awards granted or modified after the effective date; or (ii) retrospective to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter, with the cumulative effect of applying ASU 2014-12 as an adjustment to the opening retained earnings balance as of the beginning of the earliest annual period presented in the financial statements. The Company is currently evaluating the impact of the pending adoption of ASU 2014-12 on the Company's consolidated financial statements.
In May 2014, the Financial Accounting Standards Board (FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts from Customers" ("ASU 2014-09"). ASU 2014-09 provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 will require an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires entities to exercise judgment when considering the terms of the contract(s), which include (i) identifying the contract(s) with the customer; (ii) identifying the separate performance obligations in the contract; (iii) determining the transaction price; (iv) allocating the transaction price to the separate performance obligations; and (v) recognizing revenue when each performance obligation is satisfied. ASU 2014-09 will be effective for the Company’s first quarter of 2017. The Company has the option to apply the provisions of ASU 2014-09 either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of applying this ASU recognized at the date of initial application. Early adoption is not permitted. The Company is currently evaluating the method and impact the adoption of ASU 2014-09 will have on the Company's consolidated financial statements.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
Pursuant to the accounting guidance for fair value measurements and its subsequent updates, fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
Valuation techniques used by the Company are based upon observable and unobservable inputs. Observable or market inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s assumptions about market participant assumptions based on the best information available. Observable inputs are the preferred source of values. These two types of inputs create the following fair value hierarchy:
Level 1
 
 
Quoted prices in active markets for identical assets or liabilities.
 
 
 
 
 
Level 2
 
 
Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
 
 
 
 
 
Level 3
 
 
Prices or valuations that require management inputs that are both significant to the fair value measurement and unobservable.
The Company measures its cash equivalents, foreign currency exchange forward contracts and debt securities at fair value and classifies its securities in accordance with the fair value hierarchy. The Company’s money market funds and U.S. treasuries are classified within Level 1 of the fair value hierarchy and are valued based on quoted prices in active markets for identical securities.
The Company classifies its certificates of deposit, commercial paper, corporate bonds and foreign currency exchange forward contracts within Level 2 of the fair value hierarchy as follows:
Certificates of Deposit
The Company reviews market pricing and other observable market inputs for the same or similar securities obtained from a number of industry standard data providers. In the event that a transaction is observed for the same or similar security in the marketplace, the price on that transaction reflects the market price and fair value on that day. In the absence of any observable market transactions for a particular security, the fair market value at period end would be equal to the par value. These inputs represent quoted prices for similar assets or these inputs have been derived from observable market data.
Commercial Paper
The Company reviews market pricing and other observable market inputs for the same or similar securities obtained from a number of industry standard data providers. In the event that a transaction is observed for the same or similar security in the marketplace, the price on that transaction reflects the market price and fair value on that day and then follows a revised accretion schedule to determine the fair market value at period end. In the absence of any observable market transactions for a particular security, the fair market value at period end is derived by accreting from the last observable market price. These inputs represent quoted prices for similar assets or these inputs have been derived from observable market data accreted mathematically to par.
Corporate Bonds
The Company reviews trading activity and pricing for each of the corporate bond securities in its portfolio as of the measurement date and determines if pricing data of sufficient frequency and volume in an active market exists in order to support Level 1 classification of these securities. If sufficient quoted pricing for identical securities is not available, the Company obtains market pricing and other observable market inputs for similar securities from a number of industry standard data providers. In instances where multiple prices exist for similar securities, these prices are used as inputs into a distribution-curve to determine the fair market value at period end.
U.S. Agency Notes
The Company reviews trading activity and pricing for its U.S. agency notes as of the measurement date. When sufficient quoted pricing for identical securities is not available, the Company uses market pricing and other observable market inputs for similar securities obtained from a number of industry standard data providers. These inputs represent quoted prices for similar assets in active markets or these inputs have been derived from observable market data.
Foreign Currency Exchange Forward Contracts
As discussed in Note 5, "Derivative Instruments," to the Notes to Condensed Consolidated Financial Statements, the Company mainly holds non-speculative foreign exchange forward contracts to hedge certain foreign currency exchange exposures. The Company estimates the fair values of derivatives based on quoted market prices or pricing models using current market rates. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, credit risk, foreign exchange rates, and forward and spot prices for currencies.
The following tables represent the Company’s fair value hierarchy for its assets and liabilities measured at fair value on a recurring basis (in thousands): 
 
As of March 28, 2015
 
As of December 27, 2014
 
Fair Value Measured Using
 
Fair Value Measured Using
 
Level 1      
 
Level 2      
 
Level 3      
 
Total        
 
Level 1      
 
Level 2      
 
Level 3      
 
Total        
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
$
39,633

 
$

 
$

 
$
39,633

 
$
21,478

 
$

 
$

 
$
21,478

Certificates of deposit

 
9,465

 

 
9,465

 

 
8,060

 

 
8,060

Commercial paper

 
21,690

 

 
21,690

 

 
46,072

 

 
46,072

Corporate bonds

 
223,238

 

 
223,238

 

 
235,285

 

 
235,285

U.S. agency notes

 
14,508

 

 
14,508

 

 

 

 

U.S. treasuries
16,014

 

 

 
16,014

 
14,810

 

 

 
14,810

Foreign currency exchange forward contracts

 

 

 

 

 

 

 

Total assets
$
55,647

 
$
268,901

 
$

 
$
324,548

 
$
36,288

 
$
289,417

 
$

 
$
325,705

Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency exchange forward contracts
$

 
$
(117
)
 
$

 
$
(117
)
 
$

 
$
(64
)
 
$

 
$
(64
)

During the three months ended March 28, 2015, there were no transfers of assets or liabilities between Level 1 and Level 2.

Investments at fair value were as follows (in thousands): 
 
March 28, 2015
 
Adjusted Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized 
Losses
 
Fair Value    
Money market funds
$
39,633

 
$

 
$

 
$
39,633

Certificates of deposit
9,460

 
5

 

 
9,465

Commercial paper
21,691

 

 
(1
)
 
21,690

Corporate bonds
223,425

 
12

 
(199
)
 
223,238

U.S. agency notes
14,507

 
5

 
(4
)
 
14,508

U.S. treasuries
16,009

 
9

 
(4
)
 
16,014

Total available-for-sale investments
$
324,725

 
$
31

 
$
(208
)
 
$
324,548

 
 
December 27, 2014
 
Adjusted Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value    
Money market funds
$
21,478

 
$

 
$

 
$
21,478

Certificates of deposit
8,060

 

 

 
8,060

Commercial paper
46,073

 

 
(1
)
 
46,072

Corporate bonds
235,713

 
2

 
(430
)
 
235,285

U.S. treasuries
14,825

 
1

 
(16
)
 
14,810

Total available-for-sale investments
$
326,149

 
$
3

 
$
(447
)
 
$
325,705

As of March 28, 2015, the Company’s available-for-sale investments in certificates of deposit, commercial paper, corporate bonds, U.S. agency notes and U.S. treasuries have a contractual maturity term of up to 24 months. Gross realized gains (losses) on short-term and long-term investments for the three months ended March 28, 2015 and March 29, 2014 were insignificant in both periods. The specific identification method is used to account for gains and losses on available-for-sale investments.
As of March 28, 2015 and December 27, 2014, the Company held $79.0 million and $59.7 million of cash in banks, respectively, excluding restricted cash.
Cost-method Investment
Cost-method Investment
Cost-method Investment
As of March 28, 2015, the Company had an investment of $14.5 million in a privately-held company. This investment is accounted for as a cost-method investment, as the Company owns less than 20% of the voting securities and does not have the ability to exercise significant influence over operating and financial policies of the entity. This investment is carried at historical cost in the Company's condensed consolidated financial statements. The Company regularly evaluates the carrying value of this cost-method investment for impairment. If the Company believes that the carrying value of the cost basis investment is in excess of estimated fair value, the Company’s policy is to record an impairment charge in other income (expense), net, in the accompanying condensed consolidated statements of operations to adjust the carrying value to estimated fair value, when the impairment is deemed other-than-temporary. As of March 28, 2015, no event had occurred that would adversely affect the carrying value of this investment and thus no impairment charges have been recorded for this cost-method investment.
Derivative Instruments
Derivative Instruments
Derivative Instruments
Foreign Currency Exchange Forward Contracts
The Company enters into foreign currency exchange forward contracts to manage its exposure to fluctuations in foreign exchange rates that arise primarily from its euro and British pound denominated receivables and euro denominated restricted cash balance amounts that are pledged as collateral for certain stand-by and commercial letters of credit. Gains and losses on these contracts are intended to offset the impact of foreign exchange rate fluctuations on the underlying foreign currency denominated accounts receivables and restricted cash, and therefore, do not subject the Company to material balance sheet risk. The forward contracts are with one high-quality institution and the Company consistently monitors the creditworthiness of the counterparty. The forward contracts entered into during the three months ended March 28, 2015 were denominated in euros and British pounds, and had maturities of no more than 35 days. The contracts are settled for U.S. dollars at maturity at rates agreed to at inception of the contracts.
As of March 28, 2015, the Company did not designate foreign currency exchange forward contracts as hedges for accounting purposes, and accordingly changes in the fair value of these instruments are included in other gain (loss), net, in the accompanying condensed consolidated statements of operations. For the three months ended March 28, 2015 and March 29, 2014, the before-tax effect of foreign currency exchange forward contracts was a gain of $3.3 million and a loss of $1.2 million, respectively. In each of these periods, the impact of these gross gains and losses were offset by foreign exchange rate fluctuations on the underlying foreign currency denominated amounts and the combined effect is recorded in other gain (loss), net, in the accompanying condensed consolidated statements of operations.
The fair value of derivative instruments in the Company’s condensed consolidated balance sheets was as follows (in thousands):
 
As of March 28, 2015
 
As of December 27, 2014
 
Gross Notional(1)
 
Other
Accrued
   Liabilities   
 
Gross Notional(1)  
 
Other
Accrued
   Liabilities   
Foreign currency exchange forward contracts
 
 
 
 
 
 
 
Related to euro denominated receivables
$
22,350

 
$
(107
)
 
$
34,445

 
$
(53
)
Related to British pound denominated receivables
1,590

 
(5
)
 
2,678

 
(9
)
Related to restricted cash
1,103

 
(5
)
 
1,236

 
(2
)
 
$
25,043

 
$
(117
)
 
$
38,359

 
$
(64
)
 
 
 
(1) 
Represents the face amounts of forward contracts that were outstanding as of the period noted.
Balance Sheet Details
Balance Sheet Details
Balance Sheet Details
The following table provides details of selected balance sheet items (in thousands):
 
March 28, 2015
 
December 27, 2014
Inventory:
 
 
 
Raw materials
$
22,372

 
$
15,169

Work in process
45,871

 
50,046

Finished goods (1)
88,952

 
81,285

Total inventory
$
157,195

 
$
146,500

Property, plant and equipment, net:
 
 
 
Computer hardware
$
9,584

 
$
8,785

Computer software(2)
18,705

 
17,684

Laboratory and manufacturing equipment
166,514

 
162,004

Furniture and fixtures
1,433

 
1,340

Leasehold improvements
38,450

 
37,825

Construction in progress
15,340

 
14,726

Subtotal
$
250,026

 
$
242,364

Less accumulated depreciation and amortization
(167,365
)
 
(160,798
)
Total property, plant and equipment, net
$
82,661

 
$
81,566

Accrued expenses:
 
 
 
Loss contingency related to non-cancelable purchase commitments
$
5,048

 
$
5,390

Professional and other consulting fees
2,631

 
1,831

Taxes payable
2,853

 
3,993

Royalties
3,009

 
2,648

Accrued rebate and customer prepay liability
1,026

 
941

Accrued interest on convertible senior notes
875

 
219

Other accrued expenses
12,619

 
11,419

Total accrued expenses
$
28,061

 
$
26,441

 
 
 
(1) 
Included in finished goods inventory at March 28, 2015 and December 27, 2014 were $12.9 million and $10.2 million, respectively, of inventory at customer locations for which product acceptance had not occurred.
(2) 
Included in computer software at March 28, 2015 and December 27, 2014 were $7.9 million and $7.9 million, respectively, related to an enterprise resource planning ("ERP") system that the Company implemented during 2012. The unamortized ERP costs at March 28, 2015 and December 27, 2014 were $4.9 million and $5.2 million, respectively.
Restricted Cash
The Company’s long-term restricted cash balance is primarily comprised of certificates of deposit, of which the majority is not insured by the Federal Deposit Insurance Corporation. These amounts primarily collateralize the Company’s issuances of stand-by and commercial letters of credit. Additionally, the Company’s restricted cash balance includes a leave encashment fund for India employees and a corporate bank card deposit for employees in the United Kingdom.
The following table sets forth the Company's restricted cash (in thousands):
 
March 28, 2015
 
December 27, 2014
Restricted cash related to outstanding standby letters of credit
 
 
 
Value added tax license
$
1,177

 
$
1,309

Customer proposal guarantee
2,832

 
3,074

Property leases
699

 
699

Other
400

 
378

Total restricted cash
$
5,108

 
$
5,460

Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss
Comprehensive Loss
Other comprehensive loss includes certain changes in equity that are excluded from net income (loss). The following table sets forth the changes in accumulated other comprehensive loss by component for the three months ended March 28, 2015 (in thousands): 
 
 
Unrealized Gain
on Other
Available-for-Sale
Securities
 
Foreign
Currency Translation     
 
     Accumulated     
Tax Effect
 
Total        
Balance at December 27, 2014
 
$
(444
)
 
$
(3,414
)
 
$
(760
)
 
$
(4,618
)
Net current-period other comprehensive loss
 
267

 
(159
)
 

 
108

Balance at March 28, 2015
 
$
(177
)
 
$
(3,573
)
 
$
(760
)
 
$
(4,510
)
Basic and Diluted Net Income (Loss) Per Common Share
Basic and Diluted Net Income (Loss) Per Common Share
Basic and Diluted Net Income (Loss) Per Common Share
Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed using net income (loss) and the weighted average number of common shares outstanding plus potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed exercise of outstanding stock options, assumed release of outstanding restricted stock units ("RSUs") and performance stock units ("PSUs"), assumed conversion of the Notes from conversion spread (as defined in Note 9, "Convertible Senior Notes"), and assumed issuance of stock under the Company’s employee stock purchase plan ("ESPP") using the treasury stock method. The Company includes the common shares underlying PSUs in the calculation of diluted net income per share only when they become contingently issuable. In net loss periods, these potentially diluted common shares have been anti-dilutive and therefore, excluded from the diluted net loss calculation.
The following table sets forth the computation of net income (loss) per common share – basic and diluted (in thousands, except per share amounts):
 
Three Months Ended
 
March 28, 2015
 
March 29, 2014
Numerator:
 
 
 
Net income (loss)
$
12,366

 
$
(4,374
)
Denominator:
 
 
 
Basic weighted average common shares outstanding
127,840

 
121,352

Effect of dilutive securities:
 
 
 
Employee equity plans
6,569

 

Assumed conversion of convertible senior notes from conversion spread
2,895

 

Diluted weighted average common shares outstanding
137,304

 
121,352

 
 
 
 
Net income (loss) per common share
 
 
 
Basic
$
0.10

 
$
(0.04
)
Diluted
$
0.09

 
$
(0.04
)

In the three months ended March 28, 2015, the Company included the dilutive effects of the Company's Notes in the calculation of diluted net income per common shares as the average market price was above the conversion price. The dilutive impact of the Company's Notes was based on the difference between the Company's average stock price during the quarter and the conversion price of the Notes. In the three months ended March 29, 2014, the Company excluded the potential shares issuable upon conversion of the Notes in the calculation of diluted earnings per share because the market price was below the conversion price. Upon conversion of the Notes, it is the Company’s intention to pay cash equal to the lesser of the aggregate principal amount or the conversion value of the Notes being converted, therefore, only the conversion spread relating to the Notes would be included in the Company’s diluted earnings per share calculation unless their effect is anti-dilutive.
The effects of potentially outstanding shares were not included in the calculation of diluted net income per share for the three months ended March 28, 2015 because their effect would have been anti-dilutive under the treasury stock method or the performance condition of the award has not been met. As the Company incurred a net loss during the three months ended March 29, 2014, all potential stock options, RSUs, PSUs and ESPP shares have been excluded from the diluted net loss per share computation as their effects were deemed anti-dilutive.
The following sets forth the potentially dilutive shares excluded from the computation of the diluted net income (loss) per share because their effect would have been anti-dilutive (in thousands):
 
Three Months Ended
 
March 28, 2015
 
March 29, 2014
Stock options
10

 
6,135

Restricted stock units
1,505

 
5,386

Performance stock units
292

 
763

Employee stock purchase plan shares
415

 
431

Total
2,222

 
12,715

Convertible Senior Notes
Convertible Senior Notes
Convertible Senior Notes
In May 2013, the Company issued $150.0 million of 1.75% convertible senior notes due June 1, 2018 (the “Notes”). The Notes will mature on June 1, 2018, unless earlier purchased by the Company or converted. Interest is payable semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2013. The net proceeds to the Company were approximately $144.5 million.
The Notes are governed by an indenture dated as of May 30, 2013 (the "Indenture"), between the Company, as issuer, and U.S. Bank National Association, as trustee. The Notes are unsecured and do not contain any financial covenants or any restrictions on the payment of dividends, the incurrence of senior debt or other indebtedness, or the issuance or repurchase of securities by the Company.
Upon conversion, it is the Company’s intention to pay cash equal to the lesser of the aggregate principal amount or the conversion value of the Notes as cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, for any remaining conversion obligation. The initial conversion rate is 79.4834 shares of common stock per $1,000 principal amount of Notes, subject to anti-dilution adjustments. The initial conversion price is approximately $12.58 per share of common stock.
Throughout the term of the Notes, the conversion rate may be adjusted upon the occurrence of certain events, including for any cash dividends. Holders of the Notes will not receive any cash payment representing accrued and unpaid interest upon conversion of a Note. Accrued but unpaid interest will be deemed to be paid in full upon conversion rather than canceled, extinguished or forfeited. Holders may convert their Notes under the following circumstances:

during any fiscal quarter commencing after the fiscal quarter ended on September 28, 2013 (and only during such fiscal quarter) if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day;

upon the occurrence of specified corporate events described under the Indenture, such as a consolidation, merger or binding share exchange; or

at any time on or after December 1, 2017 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances.
If the Company undergoes a fundamental change as defined in the Indenture governing the Notes, holders may require the Company to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, upon the occurrence of a “make-whole fundamental change” (as defined in the Indenture), the Company may, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Notes in connection with such make-whole fundamental change.

The net carrying amounts of the debt obligation were as follows (in thousands):
 
March 28, 2015
 
December 27, 2014
Principal
$
150,000

 
$
150,000

Unamortized discount (1)
(31,049
)
 
(33,106
)
Unamortized issuance cost (1)
(2,671
)
 
(2,848
)
Net carrying amount
116,280

 
114,046

 
 
 
(1) 
Unamortized debt conversion discount and issuance costs will be amortized over the remaining life of the Notes, which is approximately three years.
In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. As of March 28, 2015 and December 27, 2014, the carrying amount of the equity component was $43.3 million, which represents the equity component of the debt discount related to the value of the conversion option of $45.0 million, net of the debt issuance costs attributable to the equity component of $1.7 million. The excess of the principal amount of the liability component over its carrying amount ("debt discount") is amortized to interest expense over the term of the Notes.
In accounting for the issuance costs of $5.5 million related to the Notes, the Company allocated the total amount incurred to the liability and equity components of the Notes based on their relative values. Issuance costs attributable to the liability component were recorded as other non-current assets and will be amortized to interest expense over the term of the Notes. The issuance costs attributable to the equity component were netted with the equity component in stockholders’ equity. Additionally, the Company initially recorded a deferred tax liability of $17.0 million in connection with the issuance of the Notes, and a corresponding reduction in valuation allowance. The impact of both was recorded to stockholders’ equity.
The Company determined that the embedded conversion option in the Notes does not require separate accounting treatment as a derivative instrument because it is both indexed to the Company’s own stock and would be classified in stockholder’s equity if freestanding.
The following table sets forth total interest expense recognized related to the Notes (in thousands): 
 
Three Months Ended
 
March 28, 2015
 
March 29, 2014
Contractual interest expense
$
656

 
$
657

Amortization of debt issuance costs
177

 
160

Amortization of debt discount
2,057

 
1,860

Total interest expense
$
2,890

 
$
2,677


The coupon rate was 1.75%. For the three months ended March 28, 2015 and March 29, 2014, the debt discount and debt issuance costs are amortized, using an annual effective interest rate of 10.23%, to interest expense over the term of the Notes.
As of March 28, 2015, the fair value of the Notes was $245.4 million. The fair value was determined based on the quoted bid price of the Notes in an over-the-counter market on March 27, 2015. The Notes are classified as Level 2 of the fair value hierarchy.
During the three months ended March 28, 2015, the closing price of the Company's common stock exceeded 130% of the applicable conversion price of the Notes on at least 20 of the last 30 consecutive trading days of the quarter; therefore, holders of the Notes may convert their notes during the three months ended June 27, 2015. Should the closing price conditions be met during the 30 consecutive trading days prior to the end of the second quarter of 2015 or a future quarter, the Notes will be convertible at their holders’ option during the immediately following quarter. Based on the closing price of the Company’s common stock of $19.59 on March 27, 2015, the if-converted value of the Notes exceeded their principal amount by approximately $83.6 million.
Stockholders' Equity
Stockholders' Equity
Stockholders’ Equity
Stock-based Compensation Plans
The Company has stock-based compensation plans pursuant to which the Company has granted stock options, RSUs and PSUs. The Company also has an employee stock purchase plan ("ESPP") for all eligible employees. As of March 28, 2015, there were a total of 15.7 million shares of common stock available for grant under the Company’s 2007 Equity Incentive Plan ("2007 Plan"). The following tables summarize the Company’s equity award activity and related information (in thousands, except per share data): 
 
Number of Stock
Options
 
Weighted-Average
Exercise
Price
  Per Share  
 
  Aggregate  
Intrinsic
Value
Outstanding at December 27, 2014
4,298

 
$
7.29

 
$
32,833

Stock options granted

 
$

 
 
Stock options exercised
(559
)
 
$
6.74

 
$
5,789

Stock options canceled

 
$

 


Outstanding at March 28, 2015
3,739

 
$
7.37

 
$
45,711

Vested and expected to vest as of March 28, 2015
3,737

 
 
 
$
45,690

Exercisable at March 28, 2015
3,687

 
$
7.36

 
$
45,097


 
The aggregate intrinsic value of unexercised stock options is calculated as the difference between the closing price of the Company’s common stock of $19.59 at March 27, 2015 and the exercise prices of the underlying stock options. The aggregate intrinsic value of the stock options that have been exercised is calculated as the difference between the fair market value of the common stock at the date of exercise and the exercise price of the underlying stock options.
 
Number of
Restricted
Stock Units
 
Weighted-
Average
 Grant Date 
Fair Value
Per Share
 
  Aggregate  
Intrinsic
Value
Outstanding at December 27, 2014
6,042

 
$
8.14

 
$
90,085

RSUs granted
1,581

 
$
17.95

 


RSUs released
(1,393
)
 
$
7.97

 
$
22,807

RSUs canceled
(78
)
 
$
8.58

 


Outstanding at March 28, 2015
6,152

 
$
10.69

 
$
120,514

Expected to vest at March 28, 2015
5,798

 


 
$
113,574


 
 
Number of
Performance
Stock Units
 
Weighted-
Average
 Grant Date 
Fair Value
Per Share
 
  Aggregate  
Intrinsic
Value
Outstanding at December 27, 2014
876

 
$
7.49

 
$
13,067

PSUs granted
438

 
$
14.97

 

PSUs released
(386
)
 
$
6.67

 
$
6,585

PSUs canceled
(191
)
 
$
7.88

 

Outstanding at March 28, 2015
737

 
$
12.14

 
$
14,444

Expected to vest at March 28, 2015
703

 

 
$
13,764


The aggregate intrinsic value of unreleased RSUs and unreleased PSUs is calculated using the closing price of the Company's common stock of $19.59 at March 27, 2015. The aggregate intrinsic value of RSUs and PSUs released is calculated using the fair market value of the common stock at the date of release.

The following table presents total stock-based compensation cost for instruments granted but not yet amortized, net of estimated forfeitures, of the Company’s equity compensation plans as of March 28, 2015. These costs are expected to be amortized on a straight-line basis over the following weighted-average periods (in thousands, except for weighted-average period):
 
Unrecognized
Compensation
Expense, Net
 
Weighted-
Average Period
(in years)
Stock options
170

 
1.5
RSUs
48,111

 
2.7
PSUs
7,083

 
1.6

Employee Stock Options
The estimated values of stock options, as well as assumptions used in calculating these values were based on estimates as follows (expense amounts in thousands):
 
Three Months Ended
Employee and Director Stock Options
March 28, 2015
 
March 29, 2014
Volatility
N/A
 
52%
Risk-free interest rate
N/A
 
1.3%
Expected life
N/A
 
4.3 years
Estimated fair value
N/A
 
$3.85
Total stock-based compensation expense
$70
 
$388
_________________
N/A
Not applicable because the Company did not grant any stock options during the period.


Employee Stock Purchase Plan

The fair value of the ESPP shares was estimated at the date of grant using the following assumptions (expense amounts in thousands):
 
Three Months Ended
Employee Stock Purchase Plan
March 28, 2015
 
March 29, 2014
Volatility
53%
 
51%
Risk-free interest rate
0.13%
 
0.11%
Expected life
0.5 years
 
0.5 years
Estimated fair value
$5.15
 
$2.57
Total stock-based compensation expense
$1,051
 
$791

Restricted Stock Units
During the three months ended March 28, 2015, the Company granted RSUs to employees and members of the Company’s board of directors to receive an aggregate of 1.6 million shares of the Company’s common stock. The Company accounted for the fair value of the RSUs using the closing market price of the Company’s common stock on the date of grant. Amortization of stock-based compensation related to RSUs in the three months ended March 28, 2015 and March 29, 2014 was approximately $5.2 million and $5.1 million, respectively.

Performance Stock Units
2015 Performance Stock Units
Pursuant to the 2007 Plan, during the first quarter of 2015, the Company granted 0.2 million target number of PSUs to certain of the Company's executive officers. The number of shares to be issued upon vesting of PSUs range from 0 to 1.5 times the target number PSUs granted depending on the relative performance of the Company's common stock price compared to the S&P North American Technology Multimedia Networking ("SPGIIPTR") Index over the span of one, two and three years of total shareholder returns.

The ranges of estimated values of the PSUs granted, as well as assumptions used in calculating these values were based on estimates as follows:
 
 
Three Months Ended
 
 
March 28, 2015
Infinera Volatility
 
48%
SPGIIPTR Index Volatility
 
18% - 19%
Risk-free interest rate
 
0.97% - 1.10%
Correlation with SPGIIPTR Index
 
0.52
Estimated fair value
 
$18.08 - $19.29

Additionally, pursuant to the 2007 Plan, during the three months ended March 28, 2015, the Company granted 0.1 million target number of PSUs to certain of its executive officers. These PSUs will only vest upon the achievement of certain specific revenue criteria and are subject to each employee's continued service to the Company through each applicable vesting date. If the financial performance metrics are not met within the time limits specified in the award agreements, the PSUs will be cancelled.
2014 Performance Stock Units
Pursuant to the 2007 Plan, during fiscal 2014, the Company granted 0.3 million target number of PSUs target number shares of PSUs to certain of the Company's executive officers. The number of shares to be issued upon vesting of PSUs range from 0 to 1.5 times the target number of PSUs granted depending on the relative performance of the Company's common stock price compared to the iShares North American Tech-Multimedia Networking ("IGN") Index over the span of one, two and three years of total shareholder returns. During the three months ended March 28, 2015, the Company released 0.2 million shares of PSUs, based on a payout of 1.5 times of the target number of PSUs.

The ranges of estimated values of the PSUs granted, as well as assumptions used in calculating these values were based on estimates as follows:
 
 
Year Ended
 
 
December 27, 2014
Infinera Volatility
 
49% - 50%
IGN Index Volatility
 
25%
Risk-free interest rate
 
0.66% - 0.71%
Correlation with IGN Index
 
0.60
Estimated fair value
 
$6.59 - $7.60

Additionally, pursuant to the 2007 Plan, during 2014, the Company granted 0.1 million shares of PSUs to several employees. These PSUs will only vest upon the achievement of certain specific performance criteria and are subject to each employee's continued service to the Company through each applicable vesting date. If the specific performance metrics are not met within the time limits specified in the award agreements, the PSUs will be cancelled.
2013 Performance Stock Units
Pursuant to the 2007 Plan, during fiscal 2013, the Company granted 0.6 million target number of PSUs to certain of its executive officers. The number of shares to be issued upon vesting of PSUs range from 0 to 1.5 times the target number of PSUs granted depending on the relative performance of the Company’s common stock price compared to the NASDAQ Telecom Composite Index over the span of one, two and three years of total shareholder returns. During the three months ended March 28, 2015, the Company released 0.2 million shares of PSUs, based on a payout of 1.5 times of the target number of PSUs.

The ranges of estimated values of the PSUs granted, as well as assumptions used in calculating these values were based on estimates as follows:
 
Year Ended
 
December 28, 2013
Infinera Volatility
55%
NASDAQ Telecom Composite Index Volatility
23%
Risk-free interest rate
0.42%
Correlation with NASDAQ Telecom Composite Index
0.56
Estimated fair value
$6.27 - $7.06

2012 Performance Stock Units
Pursuant to the 2007 Plan, during fiscal 2012, the Company granted 0.5 million shares of PSUs to certain of its executive officers. These PSUs will only vest upon the achievement of certain specific revenue and operating profit criteria and are subject to each named executive officer’s continued service to the Company. If the financial performance metrics are not met within the time limits specified in the award agreements, the PSUs will be canceled. During the three months ended March 28, 2015, the Company did not release any shares subject to these PSUs and were canceled as a result of the financial performance metrics not being met within the time limits specified in the award agreements.
Amortization of stock-based compensation related to PSUs in the three months ended March 28, 2015 and March 29, 2014 was approximately $0.9 million and $0.4 million, respectively.
Stock-Based Compensation
The following tables summarize the effects of stock-based compensation on the Company’s condensed consolidated balance sheets and statements of operations for the periods presented (in thousands):
 
March 28, 2015
 
December 27, 2014
Stock-based compensation effects in inventory
$
3,083

 
$
3,088

Stock-based compensation effects in deferred inventory cost
$
13

 
$
13

Stock-based compensation effects in fixed assets
$
113

 
$
119

 
 
Three Months Ended
 
March 28, 2015
 
March 29, 2014
Stock-based compensation effects included in net income (loss) before income taxes
 
 
 
Cost of revenue
$
482

 
$
452

Research and development
2,578

 
2,138

Sales and marketing
1,721

 
1,720

General and administration
1,666

 
1,530

 
6,447

 
5,840

Cost of revenue – amortization from balance sheet (1)
761

 
832

Total stock-based compensation expense
$
7,208

 
$
6,672

 
 
 
(1) 
Stock-based compensation expense deferred to inventory and deferred inventory costs in prior periods and recognized in the current period.
Income Taxes
Income Taxes
Income Taxes
Provision for income taxes for three months ended March 28, 2015 was $0.6 million on pre-tax income of $13.0 million. This compared to a tax provision of $0.2 million on a pre-tax loss of $4.1 million for the three months ended March 29, 2014. The increase in tax provision for the three months ended March 28, 2015 compared to the corresponding period in 2014 is attributed to stronger expected profitability in 2015, taxes being accrued in proportion to quarterly profit as it relates to total profit expected for the year, and higher foreign taxes due to an increase in cost-plus taxable profits. In all periods, the tax expense projected in the Company's effective tax rate primarily represents foreign taxes of the Company's overseas subsidiaries compensated on a cost-plus basis regardless of the level of consolidated earnings. Because of the Company's significant loss carryforward position and corresponding full valuation allowance, the Company has not been subject to federal or state tax on its U.S. income because of the availability of loss carryforwards, with the exception of nominal amounts of state taxes for which the losses are limited by statute. The release of transfer pricing reserves in the future will have a beneficial impact to tax expense, but the timing of the impact depends on factors such as expiration of the statute of limitations or settlements with tax authorities. No significant releases are expected in the near future based on information available at this time.
The Company must assess the likelihood that some portion or all of our deferred tax assets will be recovered from future taxable income within the respective jurisdictions, and to the extent the Company believes that recovery does not meet the “more-likely-than-not” standard, it must establish a valuation allowance. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management judgment is required in determining the Company's provision for income taxes, its deferred tax assets and liabilities and any valuation allowance recorded against its net deferred tax assets. At March 28, 2015 and December 27, 2014, the Company's domestic net deferred tax assets were fully reserved with a valuation allowance because, based on the available evidence, management believed at that time it was more likely than not that the Company would not be able to utilize those deferred tax assets in the future.
Notwithstanding the above, the Company has been profitable for four consecutive quarters beginning with the second quarter of 2014. If this trend continues and the Company is no longer in a cumulative loss position, it may consider the extent to which it can rely on forecasts of future income to support the realization of the Company's net U.S. deferred tax assets. These income forecasts would be considered with other positive and negative evidence, including the Company's forecasts of taxable income over the applicable carryforward periods, its current financial performance, its market environment, and other factors in evaluating the need for a full or partial valuation allowance against its net U.S. deferred tax assets. To the extent that the Company determines that deferred tax assets are realizable on a more likely than not basis, and adjustment is needed, that adjustment will be recorded in the period that the determination is made and would generally decrease the valuation allowance and record a corresponding benefit to earnings.
Segment Information
Segment Information
Segment Information
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the Company’s Chief Executive Officer ("CEO"). The Company’s CEO reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region for purposes of allocating resources and evaluating financial performance. The Company has one business activity. Accordingly, the Company is considered to be in a single reporting segment and operating unit structure.
Revenue by geographic region is based on the shipping address of the customer. The following tables set forth revenue and long-lived assets by geographic region (in thousands):
Revenue 
 
Three Months Ended
 
March 28, 2015
 
March 29, 2014
Americas:
 
 
 
United States
$
127,003

 
$
110,691

Other Americas
7,086

 
3,536

 
134,089

 
114,227

Europe, Middle East and Africa
45,879

 
25,613

Asia Pacific and Japan
6,894

 
2,975

Total revenue
$
186,862

 
$
142,815



Property, plant and equipment, net 
 
March 28, 2015
 
December 27,
2014
United States
$
79,898

 
$
79,025

Other Americas
154

 
196

Europe, Middle East and Africa
797

 
1,477

Asia Pacific and Japan
1,812

 
868

Total property, plant and equipment, net
$
82,661

 
$
81,566

Guarantees
Guarantees
Guarantees
Product Warranties
The Company warrants that its products will operate substantially in conformity with product specifications. Hardware warranties provide the purchaser with protection in the event that the product does not perform to product specifications. During the warranty period, the purchaser’s sole and exclusive remedy in the event of such defect or failure to perform is limited to the correction of the defect or failure by repair, refurbishment or replacement, at the Company’s sole option and expense. The Company's hardware warranty periods range from one to five yearsfrom date of acceptance for hardware and 90 days for software warranty. Upon delivery of the Company's products, we provide for the estimated cost to repair or replace products that may be returned under warranty. The hardware warranty accrual is based on actual historical returns and cost of repair experience and the application of those historical rates to the Company's in-warranty installed base. The provision for warranty claims fluctuates depending upon the installed base of products and the failure rates and costs of repair associated with these products under warranty. Furthermore, the Company's costs of repair vary based on repair volume and its ability to repair, rather than replace, defective units. In the event that actual product failure rates and costs to repair differ from the Company's estimates, revisions to the warranty provision are required. In addition, from time to time, specific hardware warranty accruals may be made if unforeseen technical problems arise with specific products. The Company regularly assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary.
Activity related to product warranty was as follows (in thousands): 
 
Three Months Ended
 
March 28, 2015
 
March 29, 2014
Beginning balance
$
27,040

 
$
22,908

Charges to operations
5,348

 
5,561

Utilization
(1,818
)
 
(3,242
)
Change in estimate(1)
(5,031
)
 
1,158

Balance at the end of the period
$
25,539

 
$
26,385


 
 
 
(1) 
The Company records hardware warranty liabilities based on the latest quality and cost information available as of that date. The changes in estimate shown here are due to changes in overall actual failure rates, the mix of new versus used units related to replacement of failed units, and changes in the estimated cost of repair and new parts. As our products mature over time, failure rates and repair costs generally decline leading to favorable changes in warranty reserves.
Litigation and Contingencies
Litigation and Contingencies
Litigation and Contingencies
Legal Matters
From time to time, the Company is subject to various legal proceedings, claims and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, the Company does not expect that the ultimate costs to resolve these matters will have a material effect on its consolidated financial position, results of operations, or cash flows.
Cambrian Science Patent Infringement Litigation
On July 12, 2011, the Company was notified by Level 3 that Cambrian Science Corporation ("Cambrian") filed suit against Level 3 and six other defendants, including Cox Communications, Inc., XO Communications, LLC, Global Crossing Limited, 360Networks (USA), Inc., Integra Telecom, Inc. and IXC, Inc. dba Telekenex (collectively, the "Defendants") in the U.S. District Court for the Central District of California alleging infringement of patent no. 6,775,312 (the "'312 Patent") and requesting damages for such alleged infringement (the "Cambrian Claim"). The nature of the Cambrian Claim involves allegations of infringement of the '312 Patent resulting from the Defendants’ use of certain products and systems in the Defendants’ networks, including the Infinera DTN platform. On August 24, 2011, Cambrian amended the complaint to name the Company as a defendant. The Company assumed the defense of the Cambrian Claim and filed an answer to Cambrian’s complaint on September 21, 2011, in which the Company denied infringement of the '312 Patent and raised other defenses. Cambrian filed a second amended complaint on October 6, 2011, which included many of the same allegations as in the original complaint. The Company filed its answer to the second amended complaint on October 21, 2011, in which the Company maintained the same denials and defenses as in the Company’s initial answer. On December 23, 2011, the Company filed a motion requesting that the court stay the case with respect to each of the above-noted customer Defendants. Cambrian filed its opposition to the Company’s motion on December 30, 2011. The Company’s request was denied in the court’s decision on March 7, 2012. The Company presented evidence on the appropriate meanings of relevant key words used in the patent claims during a claim construction hearing on November 20, 2012.
On June 17, 2013, the court issued an order regarding claim construction, in which the court agreed with almost all of the Company’s proposed claim constructions. On October 17, 2013, the parties met for a court-mandated mediation. On April 24, 2014, the Company filed two motions for summary judgment relating to non-infringement and Cambrian’s claim to an earlier date of invention. The court held a hearing on the summary judgment motions on June 9, 2014. On July 2, 2014, the court granted the Company's motion for summary judgment on non-infringement and entered a final judgment of non-infringement of the '312 Patent. On August 1, 2014, Cambrian filed a notice of appeal regarding the ruling of non-infringement to the Court of Appeals for the Federal Circuit and Cambrian's appeal brief was filed on November 6, 2014. The Company filed its responsive brief on January 5, 2015, and on February 5, 2015, Cambrian filed their reply brief. Oral argument of this appeal has been set for May 5, 2015. After the court granted summary judgment, the Company sought to recover certain costs and attorney's fees from Cambrian.
As of March 28, 2015, the Company concluded that the likelihood of a loss with respect to this suit was remote and the amount of any loss would be insignificant. The Company does not believe the outcome of this matter will have a material adverse effect on the Company's business, consolidated financial position, results of operations, or cash flows. Factors that the Company considered in the determination of the likelihood of a loss and the estimate of that loss in respect to this matter included the merits of the case, the district court granting the Company's motion for summary judgment for non-infringement, the entry of final judgment of non-infringement and the current stage of the litigation. However, the outcome of such legal matters is inherently unpredictable and subject to uncertainty.
Loss Contingencies
The Company is subject to the possibility of various losses arising in the ordinary course of business. These may relate to disputes, litigation and other legal actions. In the preparation of its quarterly and annual financial statements, the Company considers the likelihood of loss or the incurrence of a liability, including whether it is probable, reasonably possible or remote that a liability has been incurred, as well as the Company’s ability to reasonably estimate the amount of loss, in determining loss contingencies. In accordance with U.S. GAAP, an estimated loss contingency is accrued when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The Company regularly evaluates current information to determine whether any accruals should be adjusted and whether new accruals are required. As of March 28, 2015, the Company has accrued an immaterial amount for such liabilities.
Subsequent Event (Notes)
Subsequent Event
Subsequent Event
On April 8, 2015, the Company issued a press release in Sweden and in the U.S. announcing the Company’s intent to combine with Sweden-based Transmode AB, a Swedish company ("Transmode"), pursuant to a public exchange offer to acquire all issued and outstanding shares of Transmode (the “Offer”). In the Offer, the Company is offering Transmode’s shareholders cash and common stock as follows: (i) with respect to approximately 73.8 percent of the Transmode shares exchanged by each shareholder, approximately 0.6376 new shares of Infinera’s common stock per Transmode share; and (ii) with respect to the remaining approximately 26.2 percent of the Transmode shares exchanged by such shareholder, Swedish kronor ("SEK") 107.05 in cash per Transmode share. The board of directors of Transmode has unanimously recommended that Transmode’s shareholders accept the Offer. The foregoing reflects the payment by Transmode to its shareholders of a dividend of SEK 1.95 per share on April 23, 2015. If Transmode pays another dividend or makes any other distributions to its shareholders, with a record date occurring prior to the settlement of the Offer, the Offer consideration will be reduced accordingly.
If the Offer is accepted in its entirety, 13,037,699 shares of Infinera’s common stock ("Infinera Shares") will be issued under the Offer, corresponding to approximately 10.1 percent of Infinera’s shares outstanding. Following completion of the Offer, if accepted in its entirety, former Transmode shareholders would hold Infinera Shares representing approximately 9.2 percent of the outstanding shares of and voting power in the combined company and approximately 8.7 percent of the combined company on a fully diluted basis. The cash portion of the Offer totals approximately $88.9 million and will be financed through existing cash resources. The foregoing numbers in this paragraph are based on 27,709,236 outstanding shares in Transmode as of March 31, 2015 (excluding 79,440 of its own shares held in treasury by Transmode) and 129,093,644 outstanding shares in the Company as of March 28, 2015.
On April 9, 2015, the Company entered into a foreign currency forward contract with a notional amount of SEK 831 million ($95.3 million) at an exchange rate of 8.7402 to hedge currency exposures associated with the cash portion of the Offer. In addition, changes in the fair value of this forward contract will impact the Company's financial statements for the interim reporting periods prior to the close of the Offer.
Fair Value Measurements (Tables)
The following tables represent the Company’s fair value hierarchy for its assets and liabilities measured at fair value on a recurring basis (in thousands): 
 
As of March 28, 2015
 
As of December 27, 2014
 
Fair Value Measured Using
 
Fair Value Measured Using
 
Level 1      
 
Level 2      
 
Level 3      
 
Total        
 
Level 1      
 
Level 2      
 
Level 3      
 
Total        
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
$
39,633

 
$

 
$

 
$
39,633

 
$
21,478

 
$

 
$

 
$
21,478

Certificates of deposit

 
9,465

 

 
9,465

 

 
8,060

 

 
8,060

Commercial paper

 
21,690

 

 
21,690

 

 
46,072

 

 
46,072

Corporate bonds

 
223,238

 

 
223,238

 

 
235,285

 

 
235,285

U.S. agency notes

 
14,508

 

 
14,508

 

 

 

 

U.S. treasuries
16,014

 

 

 
16,014

 
14,810

 

 

 
14,810

Foreign currency exchange forward contracts

 

 

 

 

 

 

 

Total assets
$
55,647

 
$
268,901

 
$

 
$
324,548

 
$
36,288

 
$
289,417

 
$

 
$
325,705

Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency exchange forward contracts
$

 
$
(117
)
 
$

 
$
(117
)
 
$

 
$
(64
)
 
$

 
$
(64
)
Investments at fair value were as follows (in thousands): 
 
March 28, 2015
 
Adjusted Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized 
Losses
 
Fair Value    
Money market funds
$
39,633

 
$

 
$

 
$
39,633

Certificates of deposit
9,460

 
5

 

 
9,465

Commercial paper
21,691

 

 
(1
)
 
21,690

Corporate bonds
223,425

 
12

 
(199
)
 
223,238

U.S. agency notes
14,507

 
5

 
(4
)
 
14,508

U.S. treasuries
16,009

 
9

 
(4
)
 
16,014

Total available-for-sale investments
$
324,725

 
$
31

 
$
(208
)
 
$
324,548

 
 
December 27, 2014
 
Adjusted Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value    
Money market funds
$
21,478

 
$

 
$

 
$
21,478

Certificates of deposit
8,060

 

 

 
8,060

Commercial paper
46,073

 

 
(1
)
 
46,072

Corporate bonds
235,713

 
2

 
(430
)
 
235,285

U.S. treasuries
14,825

 
1

 
(16
)
 
14,810

Total available-for-sale investments
$
326,149

 
$
3

 
$
(447
)
 
$
325,705

Derivative Instruments (Tables)
Fair Value of Derivative Instruments not Designated as Hedging Instruments
The fair value of derivative instruments in the Company’s condensed consolidated balance sheets was as follows (in thousands):
 
As of March 28, 2015
 
As of December 27, 2014
 
Gross Notional(1)
 
Other
Accrued
   Liabilities   
 
Gross Notional(1)  
 
Other
Accrued
   Liabilities   
Foreign currency exchange forward contracts
 
 
 
 
 
 
 
Related to euro denominated receivables
$
22,350

 
$
(107
)
 
$
34,445

 
$
(53
)
Related to British pound denominated receivables
1,590

 
(5
)
 
2,678

 
(9
)
Related to restricted cash
1,103

 
(5
)
 
1,236

 
(2
)
 
$
25,043

 
$
(117
)
 
$
38,359

 
$
(64
)
 
 
 
(1) 
Represents the face amounts of forward contracts that were outstanding as of the period noted.
Balance Sheet Details (Tables)
The following table provides details of selected balance sheet items (in thousands):
 
March 28, 2015
 
December 27, 2014
Inventory:
 
 
 
Raw materials
$
22,372

 
$
15,169

Work in process
45,871

 
50,046

Finished goods (1)
88,952

 
81,285

Total inventory
$
157,195

 
$
146,500

Property, plant and equipment, net:
 
 
 
Computer hardware
$
9,584

 
$
8,785

Computer software(2)
18,705

 
17,684

Laboratory and manufacturing equipment
166,514

 
162,004

Furniture and fixtures
1,433

 
1,340

Leasehold improvements
38,450

 
37,825

Construction in progress
15,340

 
14,726

Subtotal
$
250,026

 
$
242,364

Less accumulated depreciation and amortization
(167,365
)
 
(160,798
)
Total property, plant and equipment, net
$
82,661

 
$
81,566

Accrued expenses:
 
 
 
Loss contingency related to non-cancelable purchase commitments
$
5,048

 
$
5,390

Professional and other consulting fees
2,631

 
1,831

Taxes payable
2,853

 
3,993

Royalties
3,009

 
2,648

Accrued rebate and customer prepay liability
1,026

 
941

Accrued interest on convertible senior notes
875

 
219

Other accrued expenses
12,619

 
11,419

Total accrued expenses
$
28,061

 
$
26,441

 
 
 
(1) 
Included in finished goods inventory at March 28, 2015 and December 27, 2014 were $12.9 million and $10.2 million, respectively, of inventory at customer locations for which product acceptance had not occurred.
(2) 
Included in computer software at March 28, 2015 and December 27, 2014 were $7.9 million and $7.9 million, respectively, related to an enterprise resource planning ("ERP") system that the Company implemented during 2012. The unamortized ERP costs at March 28, 2015 and December 27, 2014 were $4.9 million and $5.2 million, respectively.
The following table sets forth the Company's restricted cash (in thousands):
 
March 28, 2015
 
December 27, 2014
Restricted cash related to outstanding standby letters of credit
 
 
 
Value added tax license
$
1,177

 
$
1,309

Customer proposal guarantee
2,832

 
3,074

Property leases
699

 
699

Other
400

 
378

Total restricted cash
$
5,108

 
$
5,460

Accumulated Other Comprehensive Loss (Tables)
Summary of Changes in Accumulated Other Comprehensive Income (Loss)
Other comprehensive loss includes certain changes in equity that are excluded from net income (loss). The following table sets forth the changes in accumulated other comprehensive loss by component for the three months ended March 28, 2015 (in thousands): 
 
 
Unrealized Gain
on Other
Available-for-Sale
Securities
 
Foreign
Currency Translation     
 
     Accumulated     
Tax Effect
 
Total        
Balance at December 27, 2014
 
$
(444
)
 
$
(3,414
)
 
$
(760
)
 
$
(4,618
)
Net current-period other comprehensive loss
 
267

 
(159
)
 

 
108

Balance at March 28, 2015
 
$
(177
)
 
$
(3,573
)
 
$
(760
)
 
$
(4,510
)
Basic and Diluted Net Income (Loss) Per Common Share (Tables)
The following table sets forth the computation of net income (loss) per common share – basic and diluted (in thousands, except per share amounts):
 
Three Months Ended
 
March 28, 2015
 
March 29, 2014
Numerator:
 
 
 
Net income (loss)
$
12,366

 
$
(4,374
)
Denominator:
 
 
 
Basic weighted average common shares outstanding
127,840

 
121,352

Effect of dilutive securities:
 
 
 
Employee equity plans
6,569

 

Assumed conversion of convertible senior notes from conversion spread
2,895

 

Diluted weighted average common shares outstanding
137,304

 
121,352

 
 
 
 
Net income (loss) per common share
 
 
 
Basic
$
0.10

 
$
(0.04
)
Diluted
$
0.09

 
$
(0.04
)
The following sets forth the potentially dilutive shares excluded from the computation of the diluted net income (loss) per share because their effect would have been anti-dilutive (in thousands):
 
Three Months Ended
 
March 28, 2015
 
March 29, 2014
Stock options
10

 
6,135

Restricted stock units
1,505

 
5,386

Performance stock units
292

 
763

Employee stock purchase plan shares
415

 
431

Total
2,222

 
12,715

Convertible Senior Notes (Tables)
The net carrying amounts of the debt obligation were as follows (in thousands):
 
March 28, 2015
 
December 27, 2014
Principal
$
150,000

 
$
150,000

Unamortized discount (1)
(31,049
)
 
(33,106
)
Unamortized issuance cost (1)
(2,671
)
 
(2,848
)
Net carrying amount
116,280

 
114,046

 
 
 
(1) 
Unamortized debt conversion discount and issuance costs will be amortized over the remaining life of the Notes, which is approximately three years.
The following table sets forth total interest expense recognized related to the Notes (in thousands): 
 
Three Months Ended
 
March 28, 2015
 
March 29, 2014
Contractual interest expense
$
656

 
$
657

Amortization of debt issuance costs
177

 
160

Amortization of debt discount
2,057

 
1,860

Total interest expense
$
2,890

 
$
2,677

Stockholders' Equity (Tables)
The following tables summarize the Company’s equity award activity and related information (in thousands, except per share data): 
 
Number of Stock
Options
 
Weighted-Average
Exercise
Price
  Per Share  
 
  Aggregate  
Intrinsic
Value
Outstanding at December 27, 2014
4,298

 
$
7.29

 
$
32,833

Stock options granted

 
$

 
 
Stock options exercised
(559
)
 
$
6.74

 
$
5,789

Stock options canceled

 
$

 


Outstanding at March 28, 2015
3,739

 
$
7.37

 
$
45,711

Vested and expected to vest as of March 28, 2015
3,737

 
 
 
$
45,690

Exercisable at March 28, 2015
3,687

 
$
7.36

 
$
45,097

 
Number of
Restricted
Stock Units
 
Weighted-
Average
 Grant Date 
Fair Value
Per Share
 
  Aggregate  
Intrinsic
Value
Outstanding at December 27, 2014
6,042

 
$
8.14

 
$
90,085

RSUs granted
1,581

 
$
17.95

 


RSUs released
(1,393
)
 
$
7.97

 
$
22,807

RSUs canceled
(78
)
 
$
8.58

 


Outstanding at March 28, 2015
6,152

 
$
10.69

 
$
120,514

Expected to vest at March 28, 2015
5,798

 


 
$
113,574

 
Number of
Performance
Stock Units
 
Weighted-
Average
 Grant Date 
Fair Value
Per Share
 
  Aggregate  
Intrinsic
Value
Outstanding at December 27, 2014
876

 
$
7.49

 
$
13,067

PSUs granted
438

 
$
14.97

 

PSUs released
(386
)
 
$
6.67

 
$
6,585

PSUs canceled
(191
)
 
$
7.88

 

Outstanding at March 28, 2015
737

 
$
12.14

 
$
14,444

Expected to vest at March 28, 2015
703

 

 
$
13,764

The ranges of estimated values of the PSUs granted, as well as assumptions used in calculating these values were based on estimates as follows:
 
 
Year Ended
 
 
December 27, 2014
Infinera Volatility
 
49% - 50%
IGN Index Volatility
 
25%
Risk-free interest rate
 
0.66% - 0.71%
Correlation with IGN Index
 
0.60
Estimated fair value
 
$6.59 - $7.60
The ranges of estimated values of the PSUs granted, as well as assumptions used in calculating these values were based on estimates as follows:
 
 
Three Months Ended
 
 
March 28, 2015
Infinera Volatility
 
48%
SPGIIPTR Index Volatility
 
18% - 19%
Risk-free interest rate
 
0.97% - 1.10%
Correlation with SPGIIPTR Index
 
0.52
Estimated fair value
 
$18.08 - $19.29
The following table presents total stock-based compensation cost for instruments granted but not yet amortized, net of estimated forfeitures, of the Company’s equity compensation plans as of March 28, 2015. These costs are expected to be amortized on a straight-line basis over the following weighted-average periods (in thousands, except for weighted-average period):
 
Unrecognized
Compensation
Expense, Net
 
Weighted-
Average Period
(in years)
Stock options
170

 
1.5
RSUs
48,111

 
2.7
PSUs
7,083

 
1.6
The estimated values of stock options, as well as assumptions used in calculating these values were based on estimates as follows (expense amounts in thousands):
 
Three Months Ended
Employee and Director Stock Options
March 28, 2015
 
March 29, 2014
Volatility
N/A
 
52%
Risk-free interest rate
N/A
 
1.3%
Expected life
N/A
 
4.3 years
Estimated fair value
N/A
 
$3.85
Total stock-based compensation expense
$70
 
$388
_________________
N/A
Not applicable because the Company did not grant any stock options during the period.
The fair value of the ESPP shares was estimated at the date of grant using the following assumptions (expense amounts in thousands):
 
Three Months Ended
Employee Stock Purchase Plan
March 28, 2015
 
March 29, 2014
Volatility
53%
 
51%
Risk-free interest rate
0.13%
 
0.11%
Expected life
0.5 years
 
0.5 years
Estimated fair value
$5.15
 
$2.57
Total stock-based compensation expense
$1,051
 
$791
The ranges of estimated values of the PSUs granted, as well as assumptions used in calculating these values were based on estimates as follows:
 
Year Ended
 
December 28, 2013
Infinera Volatility
55%
NASDAQ Telecom Composite Index Volatility
23%
Risk-free interest rate
0.42%
Correlation with NASDAQ Telecom Composite Index
0.56
Estimated fair value
$6.27 - $7.06
The following tables summarize the effects of stock-based compensation on the Company’s condensed consolidated balance sheets and statements of operations for the periods presented (in thousands):
 
March 28, 2015
 
December 27, 2014
Stock-based compensation effects in inventory
$
3,083

 
$
3,088

Stock-based compensation effects in deferred inventory cost
$
13

 
$
13

Stock-based compensation effects in fixed assets
$
113

 
$
119

 
 
Three Months Ended
 
March 28, 2015
 
March 29, 2014
Stock-based compensation effects included in net income (loss) before income taxes
 
 
 
Cost of revenue
$
482

 
$
452

Research and development
2,578

 
2,138

Sales and marketing
1,721

 
1,720

General and administration
1,666

 
1,530

 
6,447

 
5,840

Cost of revenue – amortization from balance sheet (1)
761

 
832

Total stock-based compensation expense
$
7,208

 
$
6,672

 
 
 
(1) 
Stock-based compensation expense deferred to inventory and deferred inventory costs in prior periods and recognized in the current period.

Segment Information (Tables)
Revenue by geographic region is based on the shipping address of the customer. The following tables set forth revenue and long-lived assets by geographic region (in thousands):
Revenue 
 
Three Months Ended
 
March 28, 2015
 
March 29, 2014
Americas:
 
 
 
United States
$
127,003

 
$
110,691

Other Americas
7,086

 
3,536

 
134,089

 
114,227

Europe, Middle East and Africa
45,879

 
25,613

Asia Pacific and Japan
6,894

 
2,975

Total revenue
$
186,862

 
$
142,815

Property, plant and equipment, net 
 
March 28, 2015
 
December 27,
2014
United States
$
79,898

 
$
79,025

Other Americas
154

 
196

Europe, Middle East and Africa
797

 
1,477

Asia Pacific and Japan
1,812

 
868

Total property, plant and equipment, net
$
82,661

 
$
81,566

Guarantees (Tables)
Activity Related to Product Warranty
Activity related to product warranty was as follows (in thousands): 
 
Three Months Ended
 
March 28, 2015
 
March 29, 2014
Beginning balance
$
27,040

 
$
22,908

Charges to operations
5,348

 
5,561

Utilization
(1,818
)
 
(3,242
)
Change in estimate(1)
(5,031
)
 
1,158

Balance at the end of the period
$
25,539

 
$
26,385

Basis of Presentation and Significant Accounting Policies Basis of Presentation and Significant Accounting Polices (Details)
3 Months Ended
Mar. 28, 2015
Mar. 29, 2014
Concentration Risk [Line Items]
 
 
NumberOfMajorCustomersRepresentingTotalRevenue
Sales Revenue, Net [Member] |
Customer One [Member] |
Customer Concentration Risk [Member]
 
 
Concentration Risk [Line Items]
 
 
Concentration Risk, Percentage
18.00% 
21.00% 
Sales Revenue, Net [Member] |
Customer Two [Member] |
Customer Concentration Risk [Member]
 
 
Concentration Risk [Line Items]
 
 
Concentration Risk, Percentage
16.00% 
16.00% 
Fair Value Measurements - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 28, 2015
Dec. 27, 2014
Fair Value Disclosures [Abstract]
 
 
Available-for-sale investments
24 months 
 
Cash
$ 79.0 
$ 59.7 
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) (Fair Value, Measurements, Recurring, USD $)
In Thousands, unless otherwise specified
Mar. 28, 2015
Dec. 27, 2014
Assets
 
 
Total Assets
$ 324,548 
$ 325,705 
Money market funds
 
 
Assets
 
 
Total Assets
39,633 
21,478 
Certificates of deposit
 
 
Assets
 
 
Total Assets
9,465 
8,060 
Commercial paper
 
 
Assets
 
 
Total Assets
21,690 
46,072 
Corporate bonds
 
 
Assets
 
 
Total Assets
223,238 
235,285 
U.S. agency notes
 
 
Assets
 
 
Total Assets
14,508 
U.S. treasuries
 
 
Assets
 
 
Total Assets
16,014 
14,810 
Foreign currency exchange forward contracts
 
 
Assets
 
 
Total Assets
Liabilities
 
 
Total Liabilities
(117)
(64)
Level 1
 
 
Assets
 
 
Total Assets
55,647 
36,288 
Level 1 |
Money market funds
 
 
Assets
 
 
Total Assets
39,633 
21,478 
Level 1 |
Certificates of deposit
 
 
Assets
 
 
Total Assets
Level 1 |
Commercial paper
 
 
Assets
 
 
Total Assets
Level 1 |
Corporate bonds
 
 
Assets
 
 
Total Assets
Level 1 |
U.S. agency notes
 
 
Assets
 
 
Total Assets
Level 1 |
U.S. treasuries
 
 
Assets
 
 
Total Assets
16,014 
14,810 
Level 1 |
Foreign currency exchange forward contracts
 
 
Assets
 
 
Total Assets
Liabilities
 
 
Total Liabilities
Level 2
 
 
Assets
 
 
Total Assets
268,901 
289,417 
Level 2 |
Money market funds
 
 
Assets
 
 
Total Assets
Level 2 |
Certificates of deposit
 
 
Assets
 
 
Total Assets
9,465 
8,060 
Level 2 |
Commercial paper
 
 
Assets
 
 
Total Assets
21,690 
46,072 
Level 2 |
Corporate bonds
 
 
Assets
 
 
Total Assets
223,238 
235,285 
Level 2 |
U.S. agency notes
 
 
Assets
 
 
Total Assets
14,508 
Level 2 |
U.S. treasuries
 
 
Assets
 
 
Total Assets
Level 2 |
Foreign currency exchange forward contracts
 
 
Assets
 
 
Total Assets
Liabilities
 
 
Total Liabilities
(117)
(64)
Level 3
 
 
Assets
 
 
Total Assets
Level 3 |
Money market funds
 
 
Assets
 
 
Total Assets
Level 3 |
Certificates of deposit
 
 
Assets
 
 
Total Assets
Level 3 |
Commercial paper
 
 
Assets
 
 
Total Assets
Level 3 |
Corporate bonds
 
 
Assets
 
 
Total Assets
Level 3 |
U.S. agency notes
 
 
Assets
 
 
Total Assets
Level 3 |
U.S. treasuries
 
 
Assets
 
 
Total Assets
Level 3 |
Foreign currency exchange forward contracts
 
 
Assets
 
 
Total Assets
Liabilities
 
 
Total Liabilities
$ 0 
$ 0 
Fair Value Measurements - Investments at Fair Value (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 28, 2015
Dec. 27, 2014
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
 
 
Adjusted Amortized Cost
$ 324,725 
$ 326,149 
Gross Unrealized Gains
31 
Gross Unrealized Losses
(208)
(447)
Fair Value
324,548 
325,705 
Money market funds
 
 
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
 
 
Adjusted Amortized Cost
39,633 
21,478 
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value
39,633 
21,478 
Certificates of deposit
 
 
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
 
 
Adjusted Amortized Cost
9,460 
8,060 
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value
9,465 
8,060 
Commercial paper
 
 
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
 
 
Adjusted Amortized Cost
21,691 
46,073 
Gross Unrealized Gains
Gross Unrealized Losses
(1)
(1)
Fair Value
21,690 
46,072 
Corporate bonds
 
 
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
 
 
Adjusted Amortized Cost
223,425 
235,713 
Gross Unrealized Gains
12 
Gross Unrealized Losses
(199)
(430)
Fair Value
223,238 
235,285 
U.S. agency notes
 
 
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
 
 
Adjusted Amortized Cost
14,507 
 
Gross Unrealized Gains
 
Gross Unrealized Losses
(4)
 
Fair Value
14,508 
 
U.S. treasuries
 
 
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
 
 
Adjusted Amortized Cost
16,009 
14,825 
Gross Unrealized Gains
Gross Unrealized Losses
(4)
(16)
Fair Value
$ 16,014 
$ 14,810 
Cost-method Investment - Additional Information (Details) (USD $)
3 Months Ended
Mar. 28, 2015
Dec. 27, 2014
Investments, All Other Investments [Abstract]
 
 
Cost-method investment
$ 14,500,000 
$ 14,500,000 
Less than percent of voting securities
20.00% 
 
Impairment charge on cost-method investments
$ 0 
 
Derivative Instruments - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 28, 2015
Mar. 29, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]
 
 
British pound denominated receivables and typically maturities period
35 days 
 
Euro denominated forward contracts maturity period
35 days 
 
Before-tax effect of foreign currency exchange forward contracts not designated as hedging instruments, gain (loss)
$ 3.3 
$ (1.2)
Derivative Instruments - Fair Value of Derivative Instruments Not Designated as Hedging Activities (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 28, 2015
Dec. 27, 2014
Derivative [Line Items]
 
 
Forward contract notional amount
$ 25,043 1
$ 38,359 1
Other Accrued Liabilities
(117)
(64)
Designated as Hedging Instrument |
Euro Denominated Exchange Forward Contracts Receivables
 
 
Derivative [Line Items]
 
 
Forward contract notional amount
22,350 1
34,445 1
Other Accrued Liabilities
(107)
(53)
Designated as Hedging Instrument |
GBP Denominated Exchange Forward Contracts Receivables
 
 
Derivative [Line Items]
 
 
Forward contract notional amount
1,590 1
2,678 1
Other Accrued Liabilities
(5)
(9)
Designated as Hedging Instrument |
Foreign Currency Exchange Restricted Cash Forward Contracts
 
 
Derivative [Line Items]
 
 
Forward contract notional amount
1,103 1
1,236 1
Other Accrued Liabilities
$ (5)
$ (2)
Balance Sheet Details - Selected Balance Sheet Items (Details) (USD $)
Mar. 28, 2015
Dec. 27, 2014
Inventory:
 
 
Raw materials
$ 22,372,000 
$ 15,169,000 
Work in process
45,871,000 
50,046,000 
Finished goods
88,952,000 1
81,285,000 1
Total inventory
157,195,000 
146,500,000 
Property, plant and equipment, net:
 
 
Property, plant and equipment, gross
250,026,000 
242,364,000 
Less accumulated depreciation and amortization
(167,365,000)
(160,798,000)
Total property, plant and equipment, net
82,661,000 
81,566,000 
Accrued expenses:
 
 
Loss contingency related to non-cancelable purchase commitments
5,048,000 
5,390,000 
Professional and other consulting fees
2,631,000 
1,831,000 
Taxes payable
2,853,000 
3,993,000 
Royalties
3,009,000 
2,648,000 
Accrued rebate and customer prepay liability
1,026,000 
941,000 
Accrued interest on convertible senior notes
875,000 
219,000 
Other accrued expenses
12,619,000 
11,419,000 
Total accrued expenses
28,061,000 
26,441,000 
Enterprise Resource Planning Systems
 
 
Property, plant and equipment, net:
 
 
Property, plant and equipment, gross
7,900,000 
7,900,000 
Total property, plant and equipment, net
4,900,000 
5,200,000 
Computer hardware
 
 
Property, plant and equipment, net:
 
 
Property, plant and equipment, gross
9,584,000 
8,785,000 
Computer software
 
 
Property, plant and equipment, net:
 
 
Property, plant and equipment, gross
18,705,000 2
17,684,000 2
Laboratory and manufacturing equipment
 
 
Property, plant and equipment, net:
 
 
Property, plant and equipment, gross
166,514,000 
162,004,000 
Furniture and fixtures
 
 
Property, plant and equipment, net:
 
 
Property, plant and equipment, gross
1,433,000 
1,340,000 
Leasehold improvements
 
 
Property, plant and equipment, net:
 
 
Property, plant and equipment, gross
38,450,000 
37,825,000 
Construction in progress
 
 
Property, plant and equipment, net:
 
 
Property, plant and equipment, gross
15,340,000 
14,726,000 
Customer Locations
 
 
Accrued expenses:
 
 
Inventory awaiting customer acceptance
$ 12,900,000 
$ 10,200,000 
Balance Sheet Details - Restricted Cash (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 28, 2015
Dec. 27, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
Value added tax license
$ 1,177 
$ 1,309 
Customer proposal guarantee
2,832 
3,074 
Property leases
699 
699 
Other
400 
378 
Long-term restricted cash
$ 5,108 
$ 5,460 
Accumulated Other Comprehensive Loss - Summary of Changes in Accumulated Other Comprehensive Loss (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 28, 2015
Mar. 29, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Beginning balance
$ (4,618)
 
Net current-period other comprehensive loss
108 
274 
Ending balance
(4,510)
 
Unrealized Gain on Other Available-for-Sale Securities
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Beginning balance
(444)
 
Net current-period other comprehensive loss
267 
 
Ending balance
(177)
 
Foreign Currency Translation
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Beginning balance
(3,414)
 
Net current-period other comprehensive loss
(159)
 
Ending balance
(3,573)
 
Accumulated Tax Effect
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Beginning balance
(760)
 
Net current-period other comprehensive loss
 
Ending balance
$ (760)
 
Basic and Diluted Net Income (Loss) Per Common Share - Computation of Net Loss Per Common Share Basic and Diluted (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 28, 2015
Mar. 29, 2014
Earnings Per Share [Abstract]
 
 
Net income (loss)
$ 12,366 
$ (4,374)
Basic weighted average common shares outstanding (in shares)
127,840 
121,352 
Employee equity plans (in shares)
6,569 
Assumed conversion of convertible senior notes from conversion spread (in shares)
2,895 
Diluted weighted average common shares outstanding (in shares)
137,304 
121,352 
Net income (loss) per common share
 
 
Basic (in usd per share)
$ 0.10 
$ (0.04)
Diluted (in usd per share)
$ 0.09 
$ (0.04)
Basic and Diluted Net Income (Loss) Per Common Share - Antidilutive Shares Excluded from Computation of Diluted Net Loss Per Share (Details)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 28, 2015
Mar. 29, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Antidilutive securities excluded from earnings per share computation (in shares)
2,222 
12,715 
Stock options
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Antidilutive securities excluded from earnings per share computation (in shares)
10 
6,135 
Restricted stock units
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Antidilutive securities excluded from earnings per share computation (in shares)
1,505 
5,386 
Performance stock units
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Antidilutive securities excluded from earnings per share computation (in shares)
292 
763 
Employee stock purchase plan shares
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Antidilutive securities excluded from earnings per share computation (in shares)
415 
431 
Convertible Senior Notes - Additional Information (Details) (USD $)
1 Months Ended 3 Months Ended 1 Months Ended 3 Months Ended 12 Months Ended 1 Months Ended
May 31, 2013
Mar. 28, 2015
Mar. 27, 2015
Dec. 27, 2014
May 31, 2013
1.75% Convertible Senior Notes Due June 1, 2018
Mar. 28, 2015
1.75% Convertible Senior Notes Due June 1, 2018
Dec. 28, 2013
1.75% Convertible Senior Notes Due June 1, 2018
Mar. 29, 2014
1.75% Convertible Senior Notes Due June 1, 2018
May 30, 2013
1.75% Convertible Senior Notes Due June 1, 2018
May 31, 2013
Convertible Senior Notes, Conversion Circumstance One [Member]
May 31, 2013
Convertible Senior Notes, Conversion Circumstance Two [Member]
D
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument Remaining Term
 
3 years 
 
 
 
 
 
 
 
 
 
Debt instrument issued
 
 
 
 
 
 
 
 
$ 150,000,000.0 
 
 
Debt instrument interest percentage
 
 
 
 
 
1.75% 
 
1.75% 
1.75% 
 
 
Proceeds from issuance of debt, net
 
 
 
 
 
 
144,500,000 
 
 
 
 
Initial conversion rate per $1,000 principal amount of Notes
 
 
 
 
0.0794834 
 
 
 
 
 
 
Initial conversion price (in usd per share)
 
 
 
 
 
 
 
 
$ 12.58 
 
 
Convertible threshold trading days
 
 
 
 
 
 
 
 
 
20 days 
 
Convertible threshold consecutive trading days
 
 
 
 
 
 
 
 
 
30 days 
5 days 
Convertible threshold minimum percentage
 
 
 
 
 
 
 
 
 
130.00% 
 
Convertible threshold business days
 
 
 
 
 
 
 
 
 
 
Debt instrument, convertible, if-converted value in excess of principal
 
 
 
 
 
83,600,000 
 
 
 
 
1,000 
Convertible, threshold maximum percentage
 
 
 
 
 
 
 
 
 
 
98.00% 
Purchase price as a percentage on principal amount of the notes upon the occurrence of a fundamental change
100.00% 
 
 
 
 
 
 
 
 
 
 
Unamortized discount
 
31,049,000 1
 
33,106,000 1
 
 
 
 
 
 
 
Debt issuance cost
 
 
 
 
 
5,500,000 
 
 
 
 
 
Deferred tax liability
 
 
 
 
 
17,000,000 
 
 
 
 
 
Additional effective rate of interest to be used on amortized carrying value
 
 
 
 
 
10.23% 
 
10.23% 
 
 
 
Total estimated fair value of the notes
 
$ 245,400,000 
 
 
 
 
 
 
 
 
 
Closing price of common stock (in usd per share)
 
 
$ 19.59 
 
 
 
 
 
 
 
 
Convertible Senior Notes - Components of Convertible Senior Notes (Details) (USD $)
Mar. 28, 2015
Dec. 27, 2014
May 30, 2013
Debt Instrument [Line Items]
 
 
 
Unamortized discount
$ 31,049,000 1
$ 33,106,000 1
 
Unamortized issuance cost
(2,671,000)1
(2,848,000)1
 
1.75% Convertible Senior Notes Due June 1, 2018
 
 
 
Debt Instrument [Line Items]
 
 
 
Principal amount
 
 
150,000,000.0 
Initial transaction amount and net carrying amount, APIC
43,300,000 
43,341,000 
 
Convertible Debt, Noncurrent
116,280,000 
114,046,000 
 
1.75% Convertible Senior Notes Due June 1, 2018 |
Additional Paid-in Capital
 
 
 
Debt Instrument [Line Items]
 
 
 
Equity component
45,000,000 
45,000,000 
 
Debt issuance cost
1,700,000 
(1,659,000)
 
1.75% Convertible Senior Notes Due June 1, 2018 |
Long-term Debt
 
 
 
Debt Instrument [Line Items]
 
 
 
Principal amount
$ 150,000,000 
$ 150,000,000 
 
Stockholders' Equity - Additional Information (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended
Mar. 28, 2015
Mar. 27, 2015
Mar. 28, 2015
SPGIIPTR Index
Dec. 28, 2013
NASDAQ Telecom Composite Index
Dec. 27, 2014
IGN Index
Mar. 28, 2015
Performance Stock Unit Grants
Mar. 29, 2014
Performance Stock Unit Grants
Mar. 28, 2015
PSUs
Mar. 28, 2015
PSUs
Minimum
Mar. 28, 2015
PSUs
Maximum
Mar. 28, 2015
Restricted Stock Units
Mar. 29, 2014
Restricted Stock Units
Mar. 28, 2015
Two Thousand And Seven Equity Incentive Plan [Member]
NASDAQ Telecom Composite Index
Minimum
Mar. 28, 2015
Two Thousand And Seven Equity Incentive Plan [Member]
NASDAQ Telecom Composite Index
Maximum
Mar. 28, 2015
Two Thousand And Seven Equity Incentive Plan [Member]
IGN Index
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted options to employees to purchase shares of common stock (in shares)
15,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Closing price of common stock (in usd per share)
 
$ 19.59 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares available for grant cost (in shares)
 
 
200,000 
600,000 
300,000 
 
 
438,000 
 
 
1,581,000 
 
 
 
 
Amortization of stock-based compensation
 
 
 
 
 
$ 0.9 
$ 0.4 
 
 
 
$ 5.2 
$ 5.1 
 
 
 
Shares of PSUs to executive officers (in shares)
 
 
 
 
 
100,000 
 
 
 
 
 
 
 
 
 
Ranges of number of shares issued on vesting of PSUs
 
 
 
 
 
 
 
 
1.5 
 
 
1.5 
1.5 
Stockholders' Equity - Summary of Company's Equity Award Activity - Options (Details) (Stock options, USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 28, 2015
Stock options
 
Number of Stock Options
 
Number of Options, beginning balance (in shares)
4,298 
Number of options, granted (in shares)
Number of Options, exercised (in shares)
(559)
Number of Options, canceled (in shares)
Number of Options, ending balance (in shares)
3,739 
Number of Options, vested and expected to vest (in shares)
3,737 
Number of Options, exercisable (in shares)
3,687 
Weighted-Average Exercise Price Per Share
 
Weighted-Average Exercise Price Per Share, beginning balance (in usd per share)
$ 7.29 
Weighted-Average Exercise Per Share, Options granted (in usd per share)
$ 0.00 
Weighted-Average Exercise Price Per Share, Options exercised (in usd per share)
$ 6.74 
Weighted-Average Exercise Price Per Share, Options canceled (in usd per share)
$ 0.00 
Weighted-Average Exercise Price Per Share, ending balance (in usd per share)
$ 7.37 
Average Exercise Price Per Share, Exercisable (in usd per share)
$ 7.36 
Aggregate Intrinsic Value
 
Aggregate Intrinsic Value, beginning balance
$ 32,833 
Aggregate Intrinsic Value, Options exercised
5,789 
Aggregate Intrinsic Value, ending balance
45,711 
Aggregate Intrinsic Value, Vested and expected to vest
45,690 
Aggregate Intrinsic Value, Exercisable
$ 45,097 
Stockholders' Equity - Summary of Company's Equity Award Activity - RSUs (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 28, 2015
Restricted Stock Units
 
Number of Restricted Stock Units
 
Number of Restricted/Performance Stock Units, beginning balance (in shares)
6,042 
Number of shares available for grant cost (in shares)
1,581 
Number of Restricted Stock Units, released (in shares)
(1,393)
Number of Restricted Stock Units, canceled (in shares)
(78)
Number of Restricted/Performance Stock Units, ending balance (in shares)
6,152 
Number of Restricted Stock Units, Expected to vest (in shares)
5,798 
Weighted- Average Grant Date Fair Value Per Share
 
Weighted-Average Grant Date Fair Value Per Share, beginning balance (in usd per share)
$ 8.14 
Weighted-Average Grant Date Fair Value Per Share, granted (in usd per share)
$ 17.95 
Weighted-Average Grant Date Fair Value Per Share, released (in usd per share)
$ 7.97 
Weighted-Average Grant Date Fair Value Per Share, canceled (in usd per share)
$ 8.58 
Weighted-Average Grant Date Fair Value Per Share, ending balance (in usd per share)
$ 10.69 
Aggregate Intrinsic Value
 
Aggregate Intrinsic Value, beginning balance
$ 90,085 
Aggregate Intrinsic Value, RSUs released
22,807 
Aggregate Intrinsic Value, ending balance
120,514 
Aggregate Intrinsic Value, Expected to vest
$ 113,574 
Fiscal Year 2013 Grant
 
Number of Restricted Stock Units
 
Number of Restricted Stock Units, released (in shares)
(200)
Stockholders' Equity - Summary of Company's Equity Award Activity - PSUs (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended
Mar. 29, 2014
Dec. 27, 2014
Dec. 29, 2012
Mar. 27, 2015
Mar. 28, 2015
Performance stock units
Dec. 27, 2014
Performance stock units
Dec. 28, 2013
Performance stock units
Mar. 28, 2015
Performance Stock Unit Grants
Mar. 28, 2015
Minimum
Performance stock units
Dec. 27, 2014
Minimum
Performance stock units
Dec. 28, 2013
Minimum
Performance stock units
Mar. 28, 2015
Maximum
Performance stock units
Dec. 27, 2014
Maximum
Performance stock units
Dec. 28, 2013
Maximum
Performance stock units
Mar. 28, 2015
Fiscal Year 2014 Grant [Member]
Mar. 28, 2015
Fiscal Year 2013 Grant
Mar. 28, 2015
SPGIIPTR Index
Dec. 27, 2014
IGN Index
Dec. 28, 2013
NASDAQ Telecom Composite Index
Mar. 28, 2015
Two Thousand And Seven Equity Incentive Plan [Member]
IGN Index
Maximum
Mar. 28, 2015
Two Thousand And Seven Equity Incentive Plan [Member]
NASDAQ Telecom Composite Index
Minimum
Mar. 28, 2015
Two Thousand And Seven Equity Incentive Plan [Member]
NASDAQ Telecom Composite Index
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Closing price of common stock (in usd per share)
 
 
 
$ 19.59 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
infn_SharebasedCompensationArrangementbySharebasedPaymentAwardFairValueAssumptionsSPGIIPTRIndexExpectedVolatilityRate
 
 
 
 
 
 
 
 
18.00% 
 
 
19.00% 
 
 
 
 
 
 
 
 
 
 
Ranges of number of shares issued on vesting of PSUs
 
 
 
 
 
 
 
 
 
 
1.5 
 
 
 
 
 
 
 
1.5 
1.5 
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Grants In Period Portion Of Performance Stock Units Not Related To Index
 
100,000 
500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of PSUs to executive officers (in shares)
 
 
 
 
 
 
 
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Volatility
52.00% 
 
 
 
48.00% 
 
55.00% 
 
 
49.00% 
 
 
50.00% 
 
 
 
 
 
 
 
 
 
Number of Performance Stock Units
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Restricted/Performance Stock Units, beginning balance (in shares)
 
 
 
 
876,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares available for grant cost (in shares)
 
 
 
 
438,000 
 
 
 
 
 
 
 
 
 
 
 
200,000 
300,000 
600,000 
 
 
 
Number of Restricted Stock Units, released (in shares)
 
 
 
 
(386,000)
 
 
 
 
 
 
 
 
 
(200,000)
(200,000)
 
 
 
 
 
 
Number of Restricted Stock Units, canceled (in shares)
 
 
 
 
(191,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Restricted/Performance Stock Units, ending balance (in shares)
 
 
 
 
737,000 
876,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Restricted Stock Units, Expected to vest (in shares)
 
 
 
 
703,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted- Average Grant Date Fair Value Per Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Grant Date Fair Value Per Share, beginning balance (in usd per share)
 
 
 
 
$ 7.49 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Grant Date Fair Value Per Share, granted (in usd per share)
 
 
 
 
$ 14.97 
 
 
 
$ 18.08 
$ 6.59 
$ 6.27 
$ 19.29 
$ 7.60 
$ 7.06 
 
 
 
 
 
 
 
 
Weighted-Average Grant Date Fair Value Per Share, released (in usd per share)
 
 
 
 
$ 6.67 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Grant Date Fair Value Per Share, canceled (in usd per share)
 
 
 
 
$ 7.88 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Grant Date Fair Value Per Share, ending balance (in usd per share)
 
 
 
 
$ 12.14 
$ 7.49 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate Intrinsic Value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate Intrinsic Value, beginning balance
 
 
 
 
$ 13,067 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate Intrinsic Value, PSUs released
 
 
 
 
6,585 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate Intrinsic Value, ending balance
 
 
 
 
14,444 
13,067 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate Intrinsic Value, Expected to vest
 
 
 
 
$ 13,764 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Correction with NASDAQ Telecom Composite Index
 
 
 
 
52.00% 
60.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity - Total Stock Based Compensation Cost for Instruments Granted but Not Yet Amortized (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 28, 2015
Mar. 28, 2015
Restricted Stock Units
Mar. 28, 2015
Performance stock units
Dec. 27, 2014
IGN Index
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock options, Unrecognized Compensation Expense, Net
$ 170 
 
 
 
Stock options, Weighted-Average Period (in years)
1 year 5 months 16 days 
 
 
 
Unrecognized Compensation Expense, Net
 
$ 48,111 
$ 7,083 
 
Weighted-Average Period (in years)
 
2 years 8 months 12 days 
1 year 7 months 6 days 
 
Number of shares available for grant cost (in shares)
 
1,581 
438 
300 
Stockholders' Equity - Ranges of Estimated Values of Stock Options and Performance-Based Stock Options Granted (Details) (USD $)
In Thousands, except Share data in Millions, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended
Mar. 28, 2015
Mar. 29, 2014
Dec. 27, 2014
Dec. 29, 2012
Mar. 27, 2015
Mar. 28, 2015
Stock Compensation Plan
Mar. 29, 2014
Stock Compensation Plan
Mar. 28, 2015
Employee Stock Purchase Plans
Mar. 29, 2014
Employee Stock Purchase Plans
Mar. 28, 2015
Performance stock units
Dec. 27, 2014
Performance stock units
Dec. 28, 2013
Performance stock units
Mar. 28, 2015
Performance stock units
Minimum
Dec. 27, 2014
Performance stock units
Minimum
Dec. 28, 2013
Performance stock units
Minimum
Mar. 28, 2015
Performance stock units
Maximum
Dec. 27, 2014
Performance stock units
Maximum
Dec. 28, 2013
Performance stock units
Maximum
Mar. 28, 2015
Performance Stock Unit Grants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Grants In Period Portion Of Performance Stock Units Not Related To Index
 
 
0.1 
0.5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Closing price of common stock (in usd per share)
 
 
 
 
$ 19.59 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares of PSUs to executive officers (in shares)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.1 
Ranges of number of shares issued on vesting of PSUs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.5 
 
 
 
Weighted-Average Grant Date Fair Value Per Share, granted (in usd per share)
 
 
 
 
 
 
 
 
 
$ 14.97 
 
 
$ 18.08 
$ 6.59 
$ 6.27 
$ 19.29 
$ 7.60 
$ 7.06 
 
Volatility
 
52.00% 
 
 
 
 
 
53.00% 
51.00% 
48.00% 
 
55.00% 
 
49.00% 
 
 
50.00% 
 
 
NASDAQ Telecom Composite Index Volatility
 
 
 
 
 
 
 
 
 
 
 
23.00% 
 
 
 
 
 
 
 
Estimated fair value (in usd per share)
 
$ 3.85 
 
 
 
 
 
$ 5.15 
$ 2.57 
 
 
 
 
 
 
 
 
 
 
Risk-free interest rate
 
1.30% 
 
 
 
 
 
0.13% 
0.11% 
 
 
0.42% 
 
0.66% 
 
 
0.71% 
 
 
Expected life
 
4 years 3 months 18 days 
 
 
 
 
 
6 months 
6 months 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation expense
$ 7,208 
$ 6,672 
 
 
 
$ 70 
$ 388 
$ 1,051 
$ 791 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, NASDAQ Telecom Composite Index, Expected Volatility Rate
 
 
 
 
 
 
 
 
 
 
25.00% 
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Correction with NASDAQ Telecom Composite Index
 
 
 
 
 
 
 
 
 
52.00% 
60.00% 
 
 
 
 
 
 
 
 
Correlation with NASDAQ Telecom Composite Index
 
 
 
 
 
 
 
 
 
 
 
56.00% 
 
 
 
 
 
 
 
Stockholders' Equity - Estimated Fair Value of ESPP Shares (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Mar. 28, 2015
Mar. 29, 2014
Mar. 28, 2015
Performance stock units
Dec. 28, 2013
Performance stock units
Mar. 28, 2015
Employee Stock Purchase Plans
Mar. 29, 2014
Employee Stock Purchase Plans
Mar. 28, 2015
Minimum
Performance stock units
Dec. 27, 2014
Minimum
Performance stock units
Dec. 28, 2013
Minimum
Performance stock units
Mar. 28, 2015
Maximum
Performance stock units
Dec. 27, 2014
Maximum
Performance stock units
Dec. 28, 2013
Maximum
Performance stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-Average Grant Date Fair Value Per Share, granted (in usd per share)
 
 
$ 14.97 
 
 
 
$ 18.08 
$ 6.59 
$ 6.27 
$ 19.29 
$ 7.60 
$ 7.06 
Volatility
 
52.00% 
48.00% 
55.00% 
53.00% 
51.00% 
 
49.00% 
 
 
50.00% 
 
Risk-free interest rate
 
1.30% 
 
0.42% 
0.13% 
0.11% 
 
0.66% 
 
 
0.71% 
 
Expected life
 
4 years 3 months 18 days 
 
 
6 months 
6 months 
 
 
 
 
 
 
Estimated fair value (in usd per share)
 
$ 3.85 
 
 
$ 5.15 
$ 2.57 
 
 
 
 
 
 
Stock-based compensation expense
$ 7,208 
$ 6,672 
 
 
$ 1,051 
$ 791 
 
 
 
 
 
 
Stockholders' Equity - Summary of Effects of Stock-Based Compensation on Company's Balance Sheets (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 28, 2015
Dec. 27, 2014
Stock-Based Compensation Effects in Inventory
 
 
Effects Of Stock Based Compensation [Line Items]
 
 
Effects Of Stock Based Compensation
$ 3,083 
$ 3,088 
Stock-Based Compensation Effects in Deferred Inventory Cost
 
 
Effects Of Stock Based Compensation [Line Items]
 
 
Effects Of Stock Based Compensation
13 
13 
Stock-Based Compensation Effects in Fixed Assets
 
 
Effects Of Stock Based Compensation [Line Items]
 
 
Effects Of Stock Based Compensation
$ 113 
$ 119 
Stockholders' Equity - Summary of Effects of Stock-Based Compensation on Company's Statements of Operations (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 28, 2015
Mar. 29, 2014
Effects Of Stock Based Compensation [Line Items]
 
 
Stock-based compensation effects included in net income (loss) before income taxes
$ 6,447 
$ 5,840 
Cost of revenue - amortization from balance sheet
761 1
832 1
Allocated Share-based Compensation Expense
7,208 
6,672 
Cost of revenue
 
 
Effects Of Stock Based Compensation [Line Items]
 
 
Stock-based compensation effects included in net income (loss) before income taxes
482 
452 
Research and development
 
 
Effects Of Stock Based Compensation [Line Items]
 
 
Stock-based compensation effects included in net income (loss) before income taxes
2,578 
2,138 
Sales and marketing
 
 
Effects Of Stock Based Compensation [Line Items]
 
 
Stock-based compensation effects included in net income (loss) before income taxes
1,721 
1,720 
General and administration
 
 
Effects Of Stock Based Compensation [Line Items]
 
 
Stock-based compensation effects included in net income (loss) before income taxes
$ 1,666 
$ 1,530 
Income Taxes - Additional Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 28, 2015
Mar. 29, 2014
Income Tax Disclosure [Abstract]
 
 
Provision for income taxes
$ 616 
$ 248 
Pre-tax income (loss)
$ 12,982 
$ (4,126)
Segment Information - Revenue and Long-Lived Assets by Geographic Region (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 28, 2015
segment
Mar. 29, 2014
Segment Reporting [Abstract]
 
 
Number of Reportable Segments
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Total revenue
$ 186,862 
$ 142,815 
Operating Segments |
United States
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Total revenue
127,003 
110,691 
Operating Segments |
Other Americas
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Total revenue
7,086 
3,536 
Operating Segments |
Americas
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Total revenue
134,089 
114,227 
Operating Segments |
Europe, Middle East and Africa
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Total revenue
45,879 
25,613 
Operating Segments |
Asia Pacific and Japan
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
Total revenue
$ 6,894 
$ 2,975 
Segment Information - Property, Plant and Equipment, Net (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 28, 2015
Dec. 27, 2014
Geographic Information For Property Plant And Equipment [Line Items]
 
 
Total property, plant and equipment, net
$ 82,661 
$ 81,566 
Operating Segments |
United States
 
 
Geographic Information For Property Plant And Equipment [Line Items]
 
 
Total property, plant and equipment, net
79,898 
79,025 
Operating Segments |
Other Americas
 
 
Geographic Information For Property Plant And Equipment [Line Items]
 
 
Total property, plant and equipment, net
154 
196 
Operating Segments |
Europe, Middle East and Africa
 
 
Geographic Information For Property Plant And Equipment [Line Items]
 
 
Total property, plant and equipment, net
797 
1,477 
Operating Segments |
Asia Pacific and Japan
 
 
Geographic Information For Property Plant And Equipment [Line Items]
 
 
Total property, plant and equipment, net
$ 1,812 
$ 868 
Guarantees - Additional Information (Details)
3 Months Ended
Mar. 28, 2015
Minimum
 
Guarantor Obligations [Line Items]
 
Product warranty period
1 year 
Maximum
 
Guarantor Obligations [Line Items]
 
Product warranty period
5 years 
Subsequent Event (Details)
0 Months Ended
Mar. 28, 2015
USD ($)
Dec. 27, 2014
USD ($)
Apr. 23, 2015
Transmode [Member]
Subsequent Event
SEK (kr)
Apr. 8, 2015
Transmode [Member]
Subsequent Event
USD ($)
Apr. 8, 2015
Transmode [Member]
Subsequent Event
SEK (kr)
Apr. 9, 2015
Transmode [Member]
Subsequent Event
USD ($)
Apr. 9, 2015
Transmode [Member]
Subsequent Event
SEK (kr)
Mar. 31, 2015
Transmode [Member]
Subsequent Event
Subsequent Event [Line Items]
 
 
 
 
 
 
 
 
Percent of the Transmode shares exchanged
 
 
 
73.80% 
73.80% 
 
 
 
Shares of Infinera’s common stock per Transmode share
 
 
 
0.6376 
0.6376 
 
 
 
Percent of the Transmode shares exchanged in cash
 
 
 
26.20% 
26.20% 
 
 
 
Transmode shares exchanged with cash (in sek per share)
 
 
 
 
kr 107.05 
 
 
 
Business Combination, Acquiree Dividend Per Share
 
 
kr 1.95 
 
 
 
 
 
Total shares issued for business acquisition
 
 
 
13,037,699 
13,037,699 
 
 
 
Percent of Infinera stock outstanding
 
 
 
10.10% 
10.10% 
 
 
 
Former Transmode shareholders percentage stake in Infinera
 
 
 
9.20% 
9.20% 
 
 
 
Fully diluted combined company shareholders stake
 
 
 
8.70% 
8.70% 
 
 
 
Cash portion of offer
 
 
 
$ 88,900,000 
 
 
 
 
Business Combination, Acquiree Common Stock, Shares, Outstanding
 
 
 
 
 
 
 
27,709,236 
Business Combination, Acquiree Treasury Stock, Shares
 
 
 
 
 
 
 
79,440 
Common stock, shares outstanding (in shares)
129,093,644 
126,160,000 
 
 
 
 
 
 
Forward contract notional amount
$ 25,043,000 1
$ 38,359,000 1
 
 
 
$ 95,300,000 
kr 831,000,000 
 
Currency exposure exchange rate hedge
 
 
 
 
 
8.7402 
8.7402