©2008 Avanex, Inc. All rights reserved. 1

Needham & Company Growth Conference

Intelligent Photonic Solutions™

Giovanni Barbarossa

President and CEO

January 6, 2009

©2008 Avanex, Inc. All rights reserved. 2

Safe Harbor

This Presentation contains forward-looking statements concerning future

events and the future performance of the company. Forward-looking

statements are subject to risks and uncertainties and actual results could differ

materially from those projected or contemplated by the forward-looking

statements.

We encourage you to look at the company’s most recent SEC filings. The risk

factor section of the company’s most recent Form 10-Q and Form 10-K

provides information concerning issues and risks facing the company. Avanex

assumes no obligation and does not intend to update any forward-looking

statement, including guidance, as a result of new information, future events or

otherwise.

©2008 Avanex, Inc. All rights reserved. 3

Avanex At a Glance

FY’08 Revenue: $208M

FY’08 Net Income: $4.7M

WW Employees: 515

Market: Telecom Optical Components and Subsystems

2008 SAM: $1.5B

Headquarters: Fremont, California, USA

NASDAQ symbol: AVNX

©2008 Avanex, Inc. All rights reserved. 4

Wide Product Portfolio toEnable Next Generation Optical Telecommunications

Telecom Subsystems Leader

LHDWDM

LHDWDM

Long Haul NetworkLH

ROADM

Add/Drop

Metro DWDM

Ring

MetroDWDMRing SONET

Ring

MetroDWDMRing

WSS

TRANSMISSIONTRANSMISSIONTRANSMISSIONTRANSMISSION

TXPTXP

EdgeROADM

EdgeROADM

REGENERATIONREGENERATION

WSS

©2008 Avanex, Inc. All rights reserved. 5

Growth in Internet Bandwidth Demand

0

10

20

30

40

50

2006A 2007A 2008E 2009E 2010E 2011E 2012E

(figures in millions of Terabits/month) Source Cisco

’08-’12 CAGR = 51%

Consumer Broadband Mobility Enterprise

IPTV Internet TV 3G / LTESocialNetworking

MobileInternet

DatacenterConsolidation

MobileWorkforce

Long Term Opportunity

©2008 Avanex, Inc. All rights reserved. 6

Why this Slowdown will not Mimic the Telecom Bubble

► Little to no overcapacity in networks today, versus significant overcapacity and

overbuilding in the telecom bubble

► Demand for broadband services are a reality today, versus a concept in 2000/01

$400

$450

$500

$550

$600

$650

3/31/07 6/30/07 9/30/07 12/31/07 3/31/08 6/30/08 9/30/08 12/31/08

Optical Component Revenue* for Selected Vendors

In millions, *include AVNX, BKHM, EMKR, FNSR, JDSU, OPLK & OPXT, 12/31/08 Estimate

Near Term Market Challenges

©2008 Avanex, Inc. All rights reserved. 7

Gross MarginQuarterly Revenue

Financial Performance

©2008 Avanex, Inc. All rights reserved. 8

► ~$50M in cash and securities as of September 30, 2008

► No debt

► Low Fixed Cost structure

► About half of employees in low cost regions

► Outsource vast majority of manufacturing to low cost regions

► Responded Quickly to Further Reduce Cost Structure in

September 2008 with savings of ~$10M on an annualized basis

► Lowered headcount

► Shutdown one facility in North America

► Management Team Took Voluntary 10% Pay Reduction

Positioned to Succeedin Current Economic Climate

©2008 Avanex, Inc. All rights reserved. 9

Optical Components & Subsystems Leader

Strong Customer

Relationships

Focused R&D InvestmentTo Support Smarter Networks

Product LeadershipInnovative Technology

Low Fixed CostOperating Model

Business Strategy

©2008 Avanex, Inc. All rights reserved. 10

Close Partnership with Key Global OEM Customers

Strong Customer Relationships

©2008 Avanex, Inc. All rights reserved. 11

Innovation

Centers

Innovation

Centers

Low Cost

Resources

Low Cost

Resources

Outsourced

Manufacturing

Outsourced

Manufacturing

Worldwide

Customers

Worldwide

Customers

Wavelength

Management

Fremont, CA

Wavelength

Management

Fremont, CAAmplification &

Dispersion Comp

Horseheads, NY

Amplification &

Dispersion Comp

Horseheads, NYTransmission

Components

San Donato, Italy

Transmission

Components

San Donato, ItalyTransmission

Modules

Villebon, France

Transmission

Modules

Villebon, France

Derivative

Development

Shanghai, China

Derivative

Development

Shanghai, China

Operations

Hub

Bangkok, Thailand

Operations

Hub

Bangkok, Thailand

Contract

Manufacturer 1

Thailand

Contract

Manufacturer 1

ThailandContract

Manufacturer 2

China

Contract

Manufacturer 2

China

.

.

.

.

.

.

.

Contract

Manufacturer

Contract

Manufacturer

OEM 1

OEM 1

OEM 2

OEM 2

OEM

OEM

.

.

.

.

.

.

.

Low Fixed Cost Operating Model

©2008 Avanex, Inc. All rights reserved. 12

Efficient

Adv. Modulation Formats

Lower Loss

Lower Power Consumpt.

Lower Dispersion

Higher Transmission Speed

Physics, Materials

Intelligent

Electronics, Software

Monitoring

Controlling

Alerting

Managing

Automating

Flexible

Architecture, Design

Upgradeability

Reconfigurability

Tunability

Pluggability

Bandwidth on Demand

Smarter Network- Lower $/bits -

Technology Strategy

©2008 Avanex, Inc. All rights reserved. 13

Business Segments

AMPLIFICATIONDISPERSION

COMPENSATIONWAVELENGTH

MANAGEMENTTRANSMISSION

SAM Revenue Opportunity*

$400M $100M $300M $750M

SAM Annual Growth Rate

6%- 8% 5% - 7% 15% - 17% 18%- 20%

Avanex Position

Leader Leader LeaderLeader in

Modulators

* Source: OVUM-RHK Optical Components Forecast and Avanex analysis

Leader in Telecom Optics

©2008 Avanex, Inc. All rights reserved. 14

Business Segments

AMPLIFICATIONDISPERSION

COMPENSATIONWAVELENGTH

MANAGEMENTTRANSMISSION

Growth Opportunities

• Fast Transient Control 40 Gb/s Amplifier

• Tunable DC + Amplifier Integrated Subsystem

• 40 Gb/s Tunable Dispersion Compensation

• Tunable DC for 10Gb/s Submarine Networks

• ROADM and Amplifier Integrated Subsystem

• Edge 1x2 Wavelength Selective Switch Module

• 10 Gb/s modulator for SFF Tunable Transponders

• 40 and 100 Gb/s DPSK and DQPSK modulators

Robust IP: >500 patent families across all segments

Focused Investmentto Drive Long Term Growth

©2008 Avanex, Inc. All rights reserved. 15

Low-Cost Operating Model

Optical Components & Subsystems Leader

Innovative Products and Technology

Investing in Bandwidth Growth

Strong Customer Relationships

Investment Highlights

©2008 Avanex, Inc. All rights reserved. 16

ADVA and the ADVA logo are registered trademarks of ADVA Optical Networking. Alcatel and the Alcatel logo are a registered trademarks of Compagnie Financière Alcatel. CIENA and the CIENA logo are registered trademarks of CIENA Corporation. Cisco and the Cisco logo are registered trademarks of Cisco Systems, Inc. Fujitsu and the Fujitsu logo are registered trademarks of Fujitsu Limited. Huawei and the Huawei logo are registered trademarks of Huawei Technologies Co., Ltd. Lucent and the Lucent logo are registered trademarks of Lucent Technologies, Inc. Marconi and the Marconi logo are registered trademarks of Marconi Corporation plc. Nortel and the Nortel logo are registered trademarks of Nortel Networks Limited. Siemens and the Siemens logo are registered trademarks of Siemens AG. Tellabs and the Tellabs logo are registered trademarks of Tellabs. Zhone and the Zhone logo are registered trademarks of Zhone Technologies. ZTE and the ZTE logo are registered trademarks of ZTE Corporation.

Thank You