© 2008 Finisar Corporation, Confidential
Creating the World’s Largest Supplier of Optical Solutions for the Communications IndustryCreating the WorldCreating the World’’s Largest Supplier of Optical s Largest Supplier of Optical Solutions for the Communications IndustrySolutions for the Communications Industry
2© 2008 Finisar Corporation, Confidential
Financial Presentation and Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements as defined under the Private Securities Litigation Act of 1995. Except for historical information, the matters discussed in this presentation contain forward-looking statements regarding future trends or events that involve risks and uncertainties. Please be aware that these statements are only predictions and that actual events or results may differ materially. Please refer to the Company’s Form 10-K and other interim reports as filed with the Securities and Exchange Commission for a discussion of those risk factors. The Company assumes no obligation to update the information in this presentation.
GAAP ReconciliationReferences to financial measures in this presentation will include references to non-GAAP financial measures. Finisar provides a complete reconciliation between GAAP and non-GAAP financial information in its earnings release which is posted on the company’s web site (www.finisar.com)
3© 2008 Finisar Corporation, Confidential
Finisar Pre-Merger
A market leaderBroad product offering of fiber optic transceivers/transponders and components Experts in storage systems test and analysis tools
Focused on high-speed data communicationsLocal Area Networks (LANs)Storage Area Networks (SANs)Metropolitan Networks (Metro/Telecom)
Vertically integrated business modelVertical integration
• VCSELs for LAN/SAN• FP/DFBs for Metro/Telecom• Passive components• Optical packaging• Integrated circuit design
Internal off-shore manufacturing capability
SAN/LAN Transceivers
Network Protocol Analysis
Metro/Telecom Transceivers/Transponders
4© 2008 Finisar Corporation, Confidential
Data Center InnovationVirtualization drives SAN growth and optical port count Cloud computing; SAAS applications
Bandwidth Demand Continues to Drive Industry Growth
The Digital HomeProliferation of HD, video and gaming
Global IPTV and IP Video
HDTV5x - 10x
bandwidth demand over standard video
Video over wireless networks
Video and data services driving significant increase in mobile
phone traffic
5© 2008 Finisar Corporation, Confidential
Annual Revenue FY94 – FY08
0
50
100
150
200
250
300
350
400
450
$ M
illio
ns
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08
188.8
67.2
147.3
280.8
418.5
364.3
35.522.1
8.55.72.71.4
166.5185.6
440.2
6© 2008 Finisar Corporation, Confidential
Optical Transceivers for LAN/SAN/Metro/Telecom
HuaweiOptix 7500
Emulex and Qlogic HBA’s
CiscoCatalyst 4500
BrocadeSilkWorm 24000
Alcatel/LucentDMX System
Tellabs
7© 2008 Finisar Corporation, Confidential
Expanding Product Portfolio and Market Share
Building the Vertically Integrated Business Model
May 2001 March 2003 April 2004 2003-Present
FY 2006
Low-cost off-shore
production
Long Wavelength FP and DFB
lasers
Short Wavelength
VCSEL Lasers
Creating Internal IC
Design Capability
Integrate the pieces
for profitability
Step 1 Step 2 Step 3 Step 4 Step 5
Malaysia
8© 2008 Finisar Corporation, Confidential
0
500
1,000
1,500
2,000
2,500
3,000
3,500$
Mill
ions
Other 139 130 157 185 213 248 292CATV 90 95 100 105 110 116 122ROADMs 20 49 85 140 192 239 271FTTx 251 299 332 353 369 393 422Parallel 41 53 59 68 79 92 106Telecom 823 1,070 1,241 1,367 1,488 1,599 1,680LAN/SAN 372 496 461 515 556 588 602
CY05 CY06 CY07 CY08 CY09 CY10 CY11
Total Optics Market*3,494
3,2763,007
2,435
1,737
2,191
2,733
Source: Lightcounting and OVUM RHK; excludes components and optical amplifiers
9© 2008 Finisar Corporation, Confidential
0
200
400
600
800
1,000
1,200
1,400
1,600$
Mill
ions
10/40/100G Metro/Telecom 315 487 651 830 1,000 1,164 1,29910/40/100G LAN 58 95 124 198 235 261 284
CY05 CY06 CY07 CY08 CY09 CY10 CY11
The 10-40 Gigabit Opportunity
Source: Lightcounting
1,235
1,028
775
582373
1,4261,583
10© 2008 Finisar Corporation, Confidential
Optium Overview
Formed in 2000 with IPO November 2006Profitable on non-GAAP basis every quarter since IPO except oneAddressing fast growing markets with complementary products:
10Gb/s subsystems for telecom (300pin/tunable)40Gb/s subsystems for telecom (300pin/lineside)ROADMsCATV
Fast turnaround manufacturing expertise for customizationCustomer overlap but with broader product portfolio
11© 2008 Finisar Corporation, Confidential
Finisar/Optium Merger - Complementary Product Portfolio
Optium ProductsFinisar Products
40Gb/s line side
RF over fiber
10Gb/s 300pin fixed wavelength10Gb/s XFP
40Gb/s client side 10Gb/s 300pin tunable
Cable TV transmission
WSS ROADM & ROADM circuit packs
CMLs
1Gb/s - 10Gb/s pluggable modules
GPON/EPON optics
VCSELs/1310nm lasers
10Gb/s 300pin tunable (MLSE)
Minimal Product Overlap
Minimal Overlap Drives Product Synergies
Passive optics
12© 2008 Finisar Corporation, Confidential
Combination Creates Unmatched Product Line
SFP SFP+ XFP
10G Line Side 300pin
Tunable
40G Client Side
300pin
40G Line Side
300pin tunable
100Ghz ROADM
50Ghz ROADM FTTx CATV
Network Test
● ● ● ● ● ● ● ● ● ● ●
JDSU ● ● ● ● ● ● ●OpNext ● ● ● ● ●Emcore ● ● ● ● ●Avanex ● ● ● ●OpLink ● ● ●Sumitomo/Excelight ● ● ●Bookham ● ●Avago ● ● ●CoAdna ●Mintera ● ●
13© 2008 Finisar Corporation, Confidential
0
500
1,000
1,500
2,000
2,500
3,000
$ M
illio
ns
Organic growth (GPON, Parallel) 0 183Optium (ROADM, 10G, CATV) 0 827Finisar 1,353 1,518
CY07 CY09
Merger Expands Addressable Market Over 50%
Source: Lightcounting and Ovum RHK
2,528
1,353
14© 2008 Finisar Corporation, Confidential
Finisar Today
Annualized combined pro-forma* revenues: $700 millionAnnualized combined pro-forma* EBITDA (Non-GAAP): $90 million5,500 employees in 14 locations
Revenue & Profitability Leadership
Revenue & Profitability Leadership
Diversified Market FocusDiversified
Market Focus
Industry's Broadest
Product Line
Industry's Broadest
Product Line
Unmatched Manufacturing/
Engineering Capabilities
Unmatched Manufacturing/
Engineering Capabilities
Enterprise networking (LAN/SAN)Telecommunications (components, modules and subsystems)Other: Cable TV transport; Network Test & Analysis
LAN/SAN transceivers10G and 40G transceivers/transponders, WSS ROADMs, line cards and circuit packsNetwork Test & Analysis, FTTH and Cable TV transmitters, RF over Fiber
Vertical integration: Active/passive optical components and ICsInternal, off-shore manufacturing for high volume, low cost productsInternal design and quick turn manufacturing expertise for mass customization
Some of our Customers (FY2008)*
Some of our Customers (FY2008)*
* Finisar Q1FY09 annualized plus Optium Q4FY08 annualized* Finisar Q1FY09 annualized plus Optium Q4FY08 annualized
15© 2008 Finisar Corporation, Confidential
Vertical Integration: High Volume Manufacturing
2008 Huawei Core Supplier Award2005 Cisco Operational Excellence Award
Ipoh, MalaysiaAcquired 200120 acres of land640,000 ft2 facility200,000 ft2 clean room
Finisar is one of few optics companies to own assembly / manufacturing facilities
16© 2008 Finisar Corporation, Confidential
Expanding Shanghai
Originally acquired in 2001 with acquisition of Transwave FiberProvides internal source for passive optics used in long wavelength transceiversSells passives optics to merchant market (e.g. interleavers, couplers)Expansion tied to internal demand and producing new products (e.g. CML)
Expanding total space from 50,000sq ft to 150,000 sq ft Oct 2008
17© 2008 Finisar Corporation, Confidential
Xgig® The Leader in Protocol Analysis
Single unified platform for multi-protocol and multi-function analysis and test of complex networks (optical and electrical)
3G ,6G SAS/SATA
2G, 4G, 8G Fibre Channel
Xgig PlatformExpert Analysis
Traffic Generation
Jammer / BERT
1G, 10G iSCSI/Ethernet/FCoE
18© 2008 Finisar Corporation, Confidential
Explosion of Protocols Drives our Market
Time
SpeedsAndComplexity
Protocols are the internal language of storage networks…
And their number, complexity, and pace of change are all increasing
Today
ESCON .2GESCON .2G
FC 1GFC 1G
FC 2GFC 2G
FC 4GFC 4G
FC 8GFC 8G
FC 34GFC 34G
SAS 6GSAS 6G
SATA 6GSATA 6GSATA 12GSATA 12G
SAS 12GSAS 12G
SCSISCSIATAATA
FCoEFCoE
10GE10GE
SCSI-320SCSI-320
iFCPiFCP
FCIPFCIP
PCIeG2PCIeG2
FC 17GFC 17G
40/100GE40/100GE
SAS 3GSAS 3G
CE-ATACE-ATA
SATA 3GSATA 3G
FC 10GFC 10G
FC: Fibre Channel SAS: Serial Attached SCSI SATA: Serial ATA PCIe: PCI Express FCoE: Fibre Channel over Ethernet
USB 3.0USB 3.0
UWBUWB
19© 2008 Finisar Corporation, Confidential
Annual Revenue Trend
$-
$50
$100
$150
$200
$250
$300
$350
$400
$450$
Mill
ions
LAN/SAN 199.302 227.418 218.097Metro-Telecom 126.654 153.845 183.528Network Test 38.337 37.284 38.555
FY06 FY07 FY08
$418.5$364.3
$440.2
20© 2008 Finisar Corporation, Confidential
$-
$20
$40
$60
$80
$100
$120
$140
$ M
illio
ns
LAN/SAN 45.625 46.435 49.640 57.602 62.577 62.627 55.499 46.715 49.389 50.716 55.288 62.703 60.831Metro/Telecom 26.744 31.014 34.559 34.336 33.466 36.381 42.508 41.490 46.971 40.213 47.669 48.674 54.942Network Test 9.362 9.173 9.336 10.466 10.200 9.180 9.512 8.392 9.375 9.769 9.784 9.627 12.938
Q106A Q206A Q306A Q406A Q107A Q207A Q307A Q407A Q108A Q208 Q308 Q408 Q109
Quarterly Revenue Trends
108.2106.2102.4
93.586.6
81.7
107.596.6
105.7100.7
112.7121.0
128.7
21© 2008 Finisar Corporation, Confidential
$-
$5
$10
$15
$20
$25
$30
$35
$ M
illio
ns
LAN/SAN 0.496 0.853 1.269 0.567 0.907 1.228 1.891 0.968 3.096 5.244 9.929 12.150 10.024Metro-Telecom 1.952 3.874 4.165 4.892 4.896 6.828 9.673 13.893 15.147 12.993 19.213 19.065 22.194
Q106A Q206A Q306A Q406A Q107A Q207A Q307A Q407A Q108A Q208 Q308 Q408 Q109
10-40 Gbps Quarterly Revenue Trend
8.15.85.55.4
4.72.4
11.6
14.9
18.2 18.2
29.131.2
32.2
22© 2008 Finisar Corporation, Confidential
$-
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50$
Mill
ions
CATV 7.022 5.981 7.139 8.441 8.085ROADM 1.882 3.054 5.800 8.353 8.628Metro/Telecom >10G 17.182 26.933 27.012 27.829 30.055LAN/SAN >10G 0.693 0.153 0.344 0.382 0.441
Q108A Q208 Q308 Q408 Q109
Optium Quarterly Revenue Trends
26.8
36.140.3
45.029.1
47.2
23© 2008 Finisar Corporation, Confidential
$1.1$11.6$20.8Net (loss) income
$0.8$14.1$28.4Operating income (loss)
1.7%11.0%6.4%Operating margins
$2.0$20.5$54.3EBITDA
$11.4
26.0%
$47.2
NA
$47.2
Q109 Optium*
$135.2
37.2%
$440.2
$38.6
$401.6
FY 2008 Actual
$37.3Operating expense
40.0%Gross margins
$128.7Total revenue
$12.9Network Tools revenue
$115.8Optics revenue
Q109Actual
$ Millions
Financial Statements (Non-GAAP)
*Optium results not included with Finisar for Q109
24© 2008 Finisar Corporation, Confidential
Cash and EBITDA (nonGAAP)*
100
105
110
115
120
125
130
135
140
Q107AQ207A Q307AQ407A Q108AQ208AQ308A Q408AQ109A
Cas
h ($
Mill
ions
)
0
5
10
15
20
25
EBIT
DA
($ M
illio
ns)
Cash EBITDA
*Convertible debt totals $242 million ($92 million matures Oct 2008)Since Q307, $27M cash used to acquire Kodeos and AZNA