LUMENTUM ANNOUNCES FIRST QUARTER OF FISCAL YEAR 2027 FINANCIAL RESULTS
LUMENTUM ANNOUNCES FIRST QUARTER OF FISCAL YEAR 2027 FINANCIAL RESULTS • Net revenue of $1.26 billion
• Forecasting second quarter of fiscal year 2027 revenue of $1.575 billion to $1.625 billion; non-GAAP operating margin of 45.0% to 46.0%; and non-GAAP diluted net income per share of $5.90 to $6.20.
– L umentum Holdings Inc. (“Lumentum” or the “Company”) today reported results for its fiscal first quarter ended September 26, 2026.
“Lumentum built on its strong momentum in the first fiscal quarter of 2027, delivering growth across all our businesses, with pump lasers and optical circuit switches (OCS) being the leading contributors. During the quarter, we secured our second major NPO/CPO win, backed by purchase commitments exceeding $5 billion. Additionally, our OCS demand visibility has expanded significantly in recent months, positioning optical switching to become a multi-billion-dollar annual revenue stream. Finally, we continue to see strength in our cloud modules business which is showing improvement on the gross margin line,” said President and CEO Michael Hurlston.
"Looking ahead, we anticipate adding approximately $350 million in sequential growth in our second quarter, a figure greater than the quarterly revenue of the whole company just two years ago. Furthermore, we project our second quarter operating margin to exceed 45 percent.”
Net revenue for the first quarter of fiscal year 2027 was $1.26 billion, with GAAP net income of $360.3 million, or $3.54 per diluted share. Net revenue for the fourth quarter of fiscal year 2026 was $1.01 billion, with GAAP net loss of $7.2 billion, or $84.65 per diluted share. Net revenue for the first quarter of fiscal year 2026 was $533.8 million, with GAAP net income of $4.2 million, or $0.05 per diluted share.
Non-GAAP net income for the first quarter of fiscal year 2027 was $461.1 million, or $4.57 per diluted share. Non-GAAP net income for the fourth quarter of fiscal year 2026 was $326.3 million, or $3.23 per diluted share. Non-GAAP net income for the first quarter of fiscal year 2026 was $86.4 million, or $1.10 per diluted share.
The Company held $2.0 billion in total cash, cash equivalents, and short-term investments at the end of the first quarter of fiscal year 2027, a decrease of $758.8 million from the end of the fourth quarter of fiscal year 2026.
The tables above provide comparisons of quarterly results to prior periods, including sequential quarterly and year-over-year changes. A reconciliation between GAAP and non-GAAP measures is contained in this release under the section titled “Use of Non-GAAP Financial Measures.”
• Non-GAAP diluted earnings per share of $5.90 to $6.20 We have not provided reconciliations from GAAP to non-GAAP financial measures or the equivalent GAAP measure for non-GAAP financial measures in our outlook, as they cannot be provided without unreasonable effort. A large portion of non-GAAP adjustments, such as stock-based compensation and related payroll taxes, acquisition related costs, net, integration related costs, restructuring and related charges, foreign exchange losses (gains), net, non-GAAP income tax reconciling adjustments, and other non-GAAP adjustments are by their nature highly volatile and we have low visibility as to the range that may be incurred in the future.
Lumentum (NASDAQ: LITE) is a global leader in optical and photonic technologies that power the networks and infrastructure behind AI, cloud computing, and next- generation communications. Built on decades of photonics innovation, Lumentum delivers high-performance lasers, modules, and optical subsystems that enable scalable, energy-efficient data center connectivity, advanced telecom networks, industrial manufacturing, and sensing applications. Headquartered in San Jose, California, the company operates R&D, manufacturing, and sales facilities worldwide. Learn more at www.lumentum.com .
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These include statements regarding: demand in our markets (including accelerating AI demand) and for our products, revenue growth and opportunities, growth drivers, our total addressable market, and our guidance with respect to future net revenue, non-GAAP diluted earnings per share, and non-GAAP operating margin, and related assumptions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. Among the factors that could cause actual results to differ from those contemplated are: (a) uncertainty and volatility in the global markets, including uncertainty and volatility in the macroeconomic environment, volatility and uncertainty with respect to economic growth, inflationary pressures, changes in the political or economic environment, such as geopolitical conflicts, war, international trade regulation and restrictions (including tariffs, duties and export controls to be implemented by the U.S. and other countries), including for certain rare earth minerals, and the effect of such market disruptions on demand for our products, technology spending by our customers, our costs and expenses and our ability to obtain components for our products; (b) quarter-over-quarter product mix fluctuations, which can materially impact profitability measures due to the broad gross margin ranges across our portfolio; (c) decline of average selling prices across our businesses or increase in costs, either of which will also decrease our margins; (d) effects of seasonality; (e) our ability to increase our manufacturing capacity and our ability and the ability of our suppliers and contract manufacturers to meet production, quality, and delivery requirements for our forecasted demand; (f) changes in customer demand, including due to changes in inventory practices and end-customer demand, and potential order cancellations, reductions or delays and their effects; (g) our ability to attract and retain new customers, particularly in the cloud photonics and imaging and sensing markets; (h) the risk that our markets will not grow or develop as expected or that our strategies and ability to compete in those markets are not successful, (i) the risk that Lumentum’s financing or operating strategies will not be successful; (j) risks related to our restructuring initiatives and changes to our operations; (k) failure to successfully integrate acquisitions into our business or that we will not achieve the expected benefits; (l) risks related to servicing our current and future debt and compliance with the covenants under our revolving credit facility and term loans. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward- looking statements is included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 27, 2026 filed with the Securities and Exchange Commission (the “SEC) and the Company’s other filings with the SEC, including the Quarterly Report on Form 10-Q for the fiscal quarter ended September 26, 2026 which will be filed with the SEC, available at www.sec.gov, under the "Risk Factors" section and elsewhere. The forward-looking statements contained in this press release are made as of the date hereof and the Company assumes no obligation to update such statements, except as required by applicable law.
The following financial tables are presented in accordance with GAAP, unless otherwise specified.
Three Months September 26, September 27, Ended 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net revenue $ 1,262.6 $ 533.8 Cost of sales 599.5 332.8 Amortization of acquired 19.1 19.5 developed intangibles Gross profit 644.0 181.5 Operating expenses: Research and 191.8 81.4 development Selling, general and 99.3 85.1 administrative Restructuring and related — 8.3 charges Gain on sale of -6.9 — business, net Total operating 284.2 174.8 expenses Income from 359.8 6.7 operations Other income (expense), net: Interest -2.4 -5.7 expense Interest and other income, 12.9 4.2 net Total other income 10.5 -1.5 (expense), net Income before 370.3 5.2 income taxes Income tax 10.0 1.0 provision Net income $ 360.3 $ 4.2 Net income per share: Basic $ 3.90 $ 0.06 Diluted $ 3.54 $ 0.05 Shares used to compute net income per share - common stock and preferred stock assuming conversion: Basic 92.5 70.3 Diluted 101.7 78.3
September 26, 2026 June 27, 2026 ────────────────────────────────────────────────────────────────────────────── ASSETS Current assets: Cash and cash $ 1,272.2 $ 2,043.5 equivalents Short-term 707.4 694.9 investments Accounts receivable, 625.7 520.3 net Accrued accounts 100.0 — receivable Inventories 807.7 691.6 Prepayments and other 340.0 211.6 current assets Total current assets 3,853.0 4,161.9 Property, plant and 1,410.4 1,159.1 equipment, net Operating lease right-of-use assets, 26.5 29.2 net Goodwill 1,069.9 1,069.3 Other intangible 294.1 326.9 assets, net Deferred tax asset 557.3 530.9 Other non-current 62.8 30.2 assets Total assets $ 7,274.0 $ 7,307.5 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 737.1 $ 567.4 Accrued payroll and 132.7 146.3 related expenses Accrued expenses 58.0 64.9 Current portion of 1,360.3 1,596.9 long-term debt Operating lease 13.8 13.5 liabilities, current Other current 89.7 91.5 liabilities Total current 2,391.6 2,480.5 liabilities Long-term debt 39.3 40.5 Operating lease liabilities, 16.8 20.3 non-current Deferred tax 7.3 7.1 liability Other non-current 246.4 115.2 liabilities Total liabilities 2,701.4 2,663.6 Stockholders’ equity: Preferred stock, $0.001 par value, 10 authorized shares, 2.9 shares and 2.9 shares issued and 0.0 0.0 outstanding as of September 26, 2026 and June 27, 2026, respectively Common stock, $0.001 par value, 990 authorized shares, 90.6 shares and 88.6 shares issued and 0.1 0.1 outstanding as of September 26, 2026 and June 27, 2026, respectively Additional paid-in 12,002.0 12,430.1 capital Accumulated deficit -7,436.0 -7,796.3 Accumulated other 6.5 10.0 comprehensive income Total stockholders’ 4,572.6 4,643.9 equity Total liabilities and stockholders’ $ 7,274.0 $ 7,307.5 equity
In this press release, Lumentum provides investors with certain non-GAAP financial measures: gross profit, gross margin, research and development expense, selling, general and administrative expense, operating margin, income from operations, total other income (expense), net, income before income taxes, provision for income taxes, net income, shares used in per share calculation, and net income (loss) per share on a non-GAAP basis, as well as the non-GAAP measures of EBITDA and Adjusted EBITDA. Lumentum believes this non-GAAP financial information provides additional insight into the Company’s on-going business operations and results, and has therefore chosen to provide this information to investors for a more consistent basis of comparison and to help them evaluate the results of the Company’s on-going operations and enable more meaningful period to period comparisons. In addition, the Company believes that providing certain of these measures allows investors to better understand the Company’s operating performance and, importantly, to evaluate the methodology and information used by management to monitor, manage, evaluate and measure the Company’s business and results of operations. However, investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, many of the adjustments to our GAAP financial measures reflect the exclusion of items that are recurring and will be reflected in our financial results for the foreseeable future. Moreover, the non-GAAP financial measures we present may be different from non- GAAP financial measures used by other companies or may not be comparable to similarly titled measurements reported by other companies, limiting their usefulness for comparison purposes. We do not consider non-GAAP financial measures to be a substitute for, or superior to, the information provided by GAAP financial measures, and the non-GAAP financial measures used in this press release should not be considered in isolation from measures of financial performance prepared in accordance with GAAP.
Our non-GAAP measures used in this press release exclude (i) stock-based compensation and related payroll taxes, (ii) acquisition related costs, net (iii) integration related costs (income), net, (iv) amortization of acquired intangibles, (v) restructuring and related charges, (vi) intangible assets write-off, (vii) gain on sale of business, net (viii) foreign exchange losses (gains), net, (ix) loss on debt extinguishment, (x) inducement expense, (xi) non-cash interest expense, (xii) other charges or income related to non- recurring activities, and (xiii) non-GAAP income tax reconciling adjustments.
We utilize a long-term projected non-GAAP tax rate to compute our non-GAAP income tax provision. The long-term projected non-GAAP tax rate is based on a multi-year projection of our estimated annual GAAP income tax forecast, adjusted to account for the tax effect of non-GAAP pretax adjustments as well as the effects of significant non-recurring and period specific tax items. Our non-GAAP tax provision for fiscal year 2027 is based on a rate of 16.5%. The difference between our GAAP income tax provision and our non-GAAP income tax provision is presented as non-GAAP income tax reconciling adjustments.
A quantitative reconciliation between GAAP and non-GAAP financial data is included in the supplemental financial table attached to this press release.
Three Months September June 27, September Ended 26, 2026 2026 27, 2025 ────────────────────────────────────────────────────────────────────────────── Gross profit on $ 644.0 $ 477.3 $ 181.5 GAAP basis Stock-ba… compensa… and 8.9 10.5 9.7 related payroll taxes(1) Amortiza… of 19.1 19.2 19.5 acquired intangib… Other income, -0.8 -0.1 -0.4 net(3) Gross profit on $ 671.2 $ 506.9 $ 210.3 non-GAAP basis Gross margin on 53.2 % 50.4 % 39.4 % non-GAAP basis Research and developm… $ 191.8 $ 104.4 $ 81.4 on GAAP basis Stock-ba… compensa… and -105.2 -13.5 -12.0 related payroll taxes(1) Amortiza… of -0.1 -0.4 -0.4 acquired intangib… Intangib… assets — -2.5 — write-off Other charges, -1.2 -0.5 — net(3) Research and developm… $ 85.3 $ 87.5 $ 69.0 on non-GAAP basis Selling, general and administ… $ 99.3 $ 91.2 $ 85.1 on GAAP basis Stock-ba… compensa… and -32.6 -26.1 -24.8 related payroll taxes(1) Amortiza… of -13.6 -13.9 -14.5 acquired intangib… Acquisit… related — — -1.3 costs, net Integrat… related (costs) -0.3 -0.5 0.8 income, net Other charges, -1.3 -0.1 -3.8 net(3) Selling, general and administ… $ 51.5 $ 50.6 $ 41.5 on non-GAAP basis Income from operatio… $ 359.8 $ 279.3 $ 6.7 on GAAP basis Stock-ba… compensa… and 146.7 50.1 46.5 related payroll taxes(1) Amortiza… of 32.8 33.5 34.4 acquired intangib… Acquisit… related — — 1.3 costs, net Integrat… related costs 0.3 0.5 -0.8 (income), net Restruct… and — 2.4 8.3 related charges Intangib… assets — 2.5 — write-off Gain on sale of -6.9 — — business, net(2) Other charges, 1.7 0.5 3.4 net(3) Income from operatio… $ 534.4 $ 368.8 $ 99.8 on non-GAAP basis Operating margin on 42.3 % 36.6 % 18.7 % non-GAAP basis Total other income (expense… $ 10.5 $ -7,737.6 $ -1.5 net on GAAP basis Loss on debt — 7,756.6 — extingui… Induceme… — — 5.9 expense Foreign exchange losses 6.7 2.2 -1.5 (gains), net Non-cash interest 0.6 0.8 0.8 expense Total other income, $ 17.8 $ 22.0 $ 3.7 net on non-GAAP basis Income (loss) before income $ 370.3 $ -7,458.3 $ 5.2 taxes on GAAP basis Stock-ba… compensa… and 146.7 50.1 46.5 related payroll taxes(1)
Amortization of acquired intangibles 32.8 33.5 34.4 Acquisition related costs, net — — 1.3 Integration related costs (income), 0.3 0.5 -0.8 net Intangible assets write-off — 2.5 — Restructuring and related charges — 2.4 8.3 Gain on sale of business, net(2) -6.9 — — Foreign exchange losses (gains), net 6.7 2.2 -1.5 Loss on debt extinguishment — 7,756.6 — Inducement expense — — 5.9 Non-cash interest expense 0.6 0.8 0.8 Other charges, net(3) 1.7 0.5 3.4 Income before income taxes on non-GAAP $ 552.2 $ 390.8 $ 103.5 basis Income tax provision (benefit) on GAAP $ 10.0 $ -296.6 $ 1.0 basis Non-GAAP income tax reconciling 81.1 361.1 16.1 adjustments Income tax provision on non-GAAP $ 91.1 $ 64.5 $ 17.1 basis Net income (loss) on GAAP basis $ 360.3 $ -7,161.7 $ 4.2 Stock-based compensation and related 146.7 50.1 46.5 payroll taxes(1) Amortization of acquired intangibles 32.8 33.5 34.4 Acquisition related costs, net — — 1.3 Integration related costs (income), 0.3 0.5 -0.8 net Intangible assets write-off — 2.5 — Restructuring and related charges — 2.4 8.3 Gain on sale of business, net(2) -6.9 — — Loss on debt extinguishment — 7,756.6 — Inducement expense — — 5.9 Foreign exchange losses (gains), net 6.7 2.2 -1.5 Non-cash interest expense 0.6 0.8 0.8 Other charges, net(3) 1.7 0.5 3.4 Non-GAAP income tax reconciling -81.1 -361.1 -16.1 adjustments Net income on non-GAAP basis $ 461.1 $ 326.3 $ 86.4 Net income per share on non-GAAP $ 4.57 $ 3.23 $ 1.10 basis Shares used in per share calculation - 101.7 84.6 78.3 diluted on GAAP basis Non-GAAP adjustment(4) -0.7 16.5 — Shares used in per share calculation - 101.0 101.1 78.3 diluted on non-GAAP basis
(1) Stock-based compensation and related payroll taxes for the three months ended September 26, 2026 includes $89.4 million of equity award modification associated with the retirement of certain executive announced during the quarter and $14.2 million of payroll taxes on stock-based compensation.
(2) Gain on sale of business, net for the three months ended September 26, 2026 resulted from the sale of a certain product line for a total proceed of $12.3 million. The transaction comprised of assets with total book value of $5.1 million, together with associated license, supply, transition-service, and facility arrangements. We incurred selling costs of $0.3 million.
(3) Other charges (income), net for the three months ended September 26, 2026 primarily relates to $1.3 million of legal fees in selling and general and administrative expenses related to non-ordinary course legal matters and $1.2 million of certain process qualification costs in research and development expenses associated with the ramp of our Greensboro, North Carolina facility, offset in part by a $0.8 million credit related to units sold that were previously written down.
(4) The adjustment for the three months ended September 26, 2026 represents the impact of the capped call options. Our outstanding capped call options are anti- dilutive under GAAP as they are specifically designed to mitigate the dilutive impact of the 2032 Notes, such that no dilution will occur until the capped call price is exceeded. Therefore, we reduced 0.7 million shares from the capped call in the calculation of non-GAAP diluted shares in the three months ended September 26, 2026 to provide investors with useful information in evaluating our performance on a per share basis.
We calculate basic net income per share pursuant to the two-class method as a result of the issuance of the Series A Convertible Preferred Stock (the “Preferred Stock”) in March 2026. Our Preferred Stock represents a second class of common stock for purposes of computing net income per share under the two- class method as it is entitled to receive dividends on an as-converted basis in the same manner as holders of common stock and does not have any material preferential rights relative to our common stock.
As the Preferred Stock participates on an if-converted basis, and there are no dividends, the income allocated to the two classes of stock converge and the results are mathematically equal. Thus, basic and diluted net income per share is calculated assuming the Preferred Stock have been converted into common stock, and the related shares are included in the weighted average shares outstanding.
Full text with the tables
NEWS RELEASE
LUMENTUM ANNOUNCES FIRST QUARTER OF FISCAL YEAR 2027 FINANCIAL RESULTS
• Net revenue of $1.26 billion
• GAAP gross margin of 51.0%; Non-GAAP gross margin of 53.2%
• GAAP operating margin of 28.5%; Non-GAAP operating margin of 42.3%
• Forecasting second quarter of fiscal year 2027 revenue of $1.575 billion to
$1.625 billion; non-GAAP operating margin of 45.0% to 46.0%; and non-GAAP
diluted net income per share of $5.90 to $6.20.
San Jose, Calif., November 2, 2026
– L umentum Holdings Inc. (“Lumentum” or the “Company”) today reported results
for its fiscal first quarter ended September 26, 2026.
“Lumentum built on its strong momentum in the first fiscal quarter of 2027,
delivering growth across all our businesses, with pump lasers and optical
circuit switches (OCS) being the leading contributors. During the quarter, we
secured our second major NPO/CPO win, backed by purchase commitments exceeding
$5 billion. Additionally, our OCS demand visibility has expanded significantly
in recent months, positioning optical switching to become a multi-billion-dollar
annual revenue stream. Finally, we continue to see strength in our cloud modules
business which is showing improvement on the gross margin line,” said President
and CEO Michael Hurlston.
"Looking ahead, we anticipate adding approximately $350 million in sequential
growth in our second quarter, a figure greater than the quarterly revenue of the
whole company just two years ago. Furthermore, we project our second quarter
operating margin to exceed 45 percent.”
Fiscal First
Quarter Highlights:
Net revenue for the first quarter of fiscal year 2027 was $1.26 billion, with
GAAP net income of $360.3 million, or $3.54 per diluted share. Net revenue for
the fourth quarter of fiscal year 2026 was $1.01 billion, with GAAP net loss of
$7.2 billion, or $84.65 per diluted share. Net revenue for the first quarter of
fiscal year 2026 was $533.8 million, with GAAP net income of $4.2 million, or
$0.05 per diluted share.
Non-GAAP net income for the first quarter of fiscal year 2027 was $461.1
million, or $4.57 per diluted share. Non-GAAP net income for the fourth quarter
of fiscal year 2026 was $326.3 million, or $3.23 per diluted share. Non-GAAP net
income for the first quarter of fiscal year 2026 was $86.4 million, or $1.10 per
diluted share.
The Company held $2.0 billion in total cash, cash equivalents, and short-term
investments at the end of the first quarter of fiscal year 2027, a decrease of
$758.8 million from the end of the fourth quarter of fiscal year 2026.
Financial Overview – Fiscal
First
Quarter Ended September 26, 2026
GA…
Re…
($
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Q1 Q4 Q1
FY FY FY Ch…
20… 20… 20… Q/Q Y…
──────────────────────────────────────────────────────────────────────────────
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C… $ 75… 5… % $ 6… $ 3… 1… 9…
S… 50… 4… % 3… 1… 4… 2…
T… $ 1,… 1… % $ 1… $ 5… 2… 1…
The tables above provide comparisons of quarterly results to prior periods,
including sequential quarterly and year-over-year changes. A reconciliation
between GAAP and non-GAAP measures is contained in this release under the
section titled “Use of Non-GAAP Financial Measures.”
Business Outlook
Lumentum expects the following for the
second
quarter of fiscal year 2027:
• Net revenue in the range of $1.575 billion to $1.625 billion
• Non-GAAP operating margin of 45.0% to 46.0%
• Non-GAAP diluted earnings per share of $5.90 to $6.20
We have not provided reconciliations from GAAP to non-GAAP financial measures or
the equivalent GAAP measure for non-GAAP financial measures in our outlook, as
they cannot be provided without unreasonable effort. A large portion of non-GAAP
adjustments, such as stock-based compensation and related payroll taxes,
acquisition related costs, net, integration related costs, restructuring and
related charges, foreign exchange losses (gains), net, non-GAAP income tax
reconciling adjustments, and other non-GAAP adjustments are by their nature
highly volatile and we have low visibility as to the range that may be incurred
in the future.
About Lumentum
Lumentum (NASDAQ: LITE) is a global leader in optical and photonic technologies
that power the networks and infrastructure behind AI, cloud computing, and next-
generation communications. Built on decades of photonics innovation, Lumentum
delivers high-performance lasers, modules, and optical subsystems that enable
scalable, energy-efficient data center connectivity, advanced telecom networks,
industrial manufacturing, and sensing applications. Headquartered in San Jose,
California, the company operates R&D, manufacturing, and sales facilities
worldwide. Learn more at www.lumentum.com .
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These include statements regarding: demand in our markets
(including accelerating AI demand) and for our products, revenue growth and
opportunities, growth drivers, our total addressable market, and our guidance
with respect to future net revenue, non-GAAP diluted earnings per share, and
non-GAAP operating margin, and related assumptions. These forward-looking
statements involve risks and uncertainties that could cause actual results to
differ materially from those projected. Among the factors that could cause
actual results to differ from those contemplated are: (a) uncertainty and
volatility in the global markets, including uncertainty and volatility in the
macroeconomic environment, volatility and uncertainty with respect to economic
growth, inflationary pressures, changes in the political or economic
environment, such as geopolitical conflicts, war, international trade regulation
and restrictions (including tariffs, duties and export controls to be
implemented by the U.S. and other countries), including for certain rare earth
minerals, and the effect of such market disruptions on demand for our products,
technology spending by our customers, our costs and expenses and our ability to
obtain components for our products; (b) quarter-over-quarter product mix
fluctuations, which can materially impact profitability measures due to the
broad gross margin ranges across our portfolio; (c) decline of average selling
prices across our businesses or increase in costs, either of which will also
decrease our margins; (d) effects of seasonality; (e) our ability to increase
our manufacturing capacity and our ability and the ability of our suppliers and
contract manufacturers to meet production, quality, and delivery requirements
for our forecasted demand; (f) changes in customer demand, including due to
changes in inventory practices and end-customer demand, and potential order
cancellations, reductions or delays and their effects; (g) our ability to
attract and retain new customers, particularly in the cloud photonics and
imaging and sensing markets; (h) the risk that our markets will not grow or
develop as expected or that our strategies and ability to compete in those
markets are not successful, (i) the risk that Lumentum’s financing or operating
strategies will not be successful; (j) risks related to our restructuring
initiatives and changes to our operations; (k) failure to successfully integrate
acquisitions into our business or that we will not achieve the expected
benefits; (l) risks related to servicing our current and future debt and
compliance with the covenants under our revolving credit facility and term
loans. A detailed discussion of these and other risks and uncertainties that
could cause actual results and events to differ materially from such forward-
looking statements is included in the Company’s Annual Report on Form 10-K for
the fiscal year ended June 27, 2026 filed with the Securities and Exchange
Commission (the “SEC) and the Company’s other filings with the SEC, including
the Quarterly Report on Form 10-Q for the fiscal quarter ended September 26,
2026 which will be filed with the SEC, available at www.sec.gov, under the "Risk
Factors" section and elsewhere. The forward-looking statements contained in this
press release are made as of the date hereof and the Company assumes no
obligation to update such statements, except as required by applicable law.
Contact Information
Investors: Kathy Ta, +1.408.750.3853; investor.relations@lumentum.com
Media: Victoria McDonald, +1.408.404.0636; media@lumentum.com
Category: Financial
The following financial tables are presented in accordance with GAAP, unless
otherwise specified.
LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
Three Months September 26, September 27,
Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net revenue $ 1,262.6 $ 533.8
Cost of sales 599.5 332.8
Amortization of
acquired 19.1 19.5
developed
intangibles
Gross profit 644.0 181.5
Operating
expenses:
Research and 191.8 81.4
development
Selling,
general and 99.3 85.1
administrative
Restructuring
and related — 8.3
charges
Gain on sale of -6.9 —
business, net
Total operating 284.2 174.8
expenses
Income from 359.8 6.7
operations
Other income
(expense), net:
Interest -2.4 -5.7
expense
Interest and
other income, 12.9 4.2
net
Total other
income 10.5 -1.5
(expense), net
Income before 370.3 5.2
income taxes
Income tax 10.0 1.0
provision
Net income $ 360.3 $ 4.2
Net income per
share:
Basic $ 3.90 $ 0.06
Diluted $ 3.54 $ 0.05
Shares used to
compute net
income per
share - common
stock and
preferred stock
assuming
conversion:
Basic 92.5 70.3
Diluted 101.7 78.3
LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except per share data)
(unaudited )
September 26, 2026 June 27, 2026
──────────────────────────────────────────────────────────────────────────────
ASSETS
Current assets:
Cash and cash $ 1,272.2 $ 2,043.5
equivalents
Short-term 707.4 694.9
investments
Accounts receivable, 625.7 520.3
net
Accrued accounts 100.0 —
receivable
Inventories 807.7 691.6
Prepayments and other 340.0 211.6
current assets
Total current assets 3,853.0 4,161.9
Property, plant and 1,410.4 1,159.1
equipment, net
Operating lease
right-of-use assets, 26.5 29.2
net
Goodwill 1,069.9 1,069.3
Other intangible 294.1 326.9
assets, net
Deferred tax asset 557.3 530.9
Other non-current 62.8 30.2
assets
Total assets $ 7,274.0 $ 7,307.5
LIABILITIES AND
STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 737.1 $ 567.4
Accrued payroll and 132.7 146.3
related expenses
Accrued expenses 58.0 64.9
Current portion of 1,360.3 1,596.9
long-term debt
Operating lease 13.8 13.5
liabilities, current
Other current 89.7 91.5
liabilities
Total current 2,391.6 2,480.5
liabilities
Long-term debt 39.3 40.5
Operating lease
liabilities, 16.8 20.3
non-current
Deferred tax 7.3 7.1
liability
Other non-current 246.4 115.2
liabilities
Total liabilities 2,701.4 2,663.6
Stockholders’ equity:
Preferred stock,
$0.001 par value, 10
authorized shares,
2.9 shares and 2.9
shares issued and 0.0 0.0
outstanding as of
September 26, 2026
and June 27, 2026,
respectively
Common stock, $0.001
par value, 990
authorized shares,
90.6 shares and 88.6
shares issued and 0.1 0.1
outstanding as of
September 26, 2026
and June 27, 2026,
respectively
Additional paid-in 12,002.0 12,430.1
capital
Accumulated deficit -7,436.0 -7,796.3
Accumulated other 6.5 10.0
comprehensive income
Total stockholders’ 4,572.6 4,643.9
equity
Total liabilities and
stockholders’ $ 7,274.0 $ 7,307.5
equity
Use of Non-GAAP Financial Measures
In this press release, Lumentum provides investors with certain non-GAAP
financial measures: gross profit, gross margin, research and development
expense, selling, general and administrative expense, operating margin, income
from operations, total other income (expense), net, income before income taxes,
provision for income taxes, net income, shares used in per share calculation,
and net income (loss) per share on a non-GAAP basis, as well as the non-GAAP
measures of EBITDA and Adjusted EBITDA. Lumentum believes this non-GAAP
financial information provides additional insight into the Company’s on-going
business operations and results, and has therefore chosen to provide this
information to investors for a more consistent basis of comparison and to help
them evaluate the results of the Company’s on-going operations and enable more
meaningful period to period comparisons. In addition, the Company believes that
providing certain of these measures allows investors to better understand the
Company’s operating performance and, importantly, to evaluate the methodology
and information used by management to monitor, manage, evaluate and measure the
Company’s business and results of operations. However, investors are cautioned
that there are material limitations associated with the use of non-GAAP
financial measures as an analytical tool. In particular, many of the adjustments
to our GAAP financial measures reflect the exclusion of items that are recurring
and will be reflected in our financial results for the foreseeable future.
Moreover, the non-GAAP financial measures we present may be different from non-
GAAP financial measures used by other companies or may not be comparable to
similarly titled measurements reported by other companies, limiting their
usefulness for comparison purposes. We do not consider non-GAAP financial
measures to be a substitute for, or superior to, the information provided by
GAAP financial measures, and the non-GAAP financial measures used in this press
release should not be considered in isolation from measures of financial
performance prepared in accordance with GAAP.
Our non-GAAP measures used in this press release exclude (i) stock-based
compensation and related payroll taxes, (ii) acquisition related costs, net
(iii) integration related costs (income), net, (iv) amortization of acquired
intangibles, (v) restructuring and related charges, (vi) intangible assets
write-off, (vii) gain on sale of business, net (viii) foreign exchange losses
(gains), net, (ix) loss on debt extinguishment, (x) inducement expense, (xi)
non-cash interest expense, (xii) other charges or income related to non-
recurring activities, and (xiii) non-GAAP income tax reconciling adjustments.
We utilize a long-term projected non-GAAP tax rate to compute our non-GAAP
income tax provision. The long-term projected non-GAAP tax rate is based on a
multi-year projection of our estimated annual GAAP income tax forecast, adjusted
to account for the tax effect of non-GAAP pretax adjustments as well as the
effects of significant non-recurring and period specific tax items. Our non-GAAP
tax provision for fiscal year 2027 is based on a rate of 16.5%. The difference
between our GAAP income tax provision and our non-GAAP income tax provision is
presented as non-GAAP income tax reconciling adjustments.
A quantitative reconciliation between GAAP and non-GAAP financial data is
included in the supplemental financial table attached to this press release.
LUMENTUM HOLDINGS INC.
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(in millions, except per share data)
(unaudited)
Three
Months September June 27, September
Ended 26, 2026 2026 27, 2025
──────────────────────────────────────────────────────────────────────────────
Gross
profit on $ 644.0 $ 477.3 $ 181.5
GAAP
basis
Stock-ba…
compensa…
and 8.9 10.5 9.7
related
payroll
taxes(1)
Amortiza…
of 19.1 19.2 19.5
acquired
intangib…
Other
income, -0.8 -0.1 -0.4
net(3)
Gross
profit on $ 671.2 $ 506.9 $ 210.3
non-GAAP
basis
Gross
margin on 53.2 % 50.4 % 39.4 %
non-GAAP
basis
Research
and
developm… $ 191.8 $ 104.4 $ 81.4
on GAAP
basis
Stock-ba…
compensa…
and -105.2 -13.5 -12.0
related
payroll
taxes(1)
Amortiza…
of -0.1 -0.4 -0.4
acquired
intangib…
Intangib…
assets — -2.5 —
write-off
Other
charges, -1.2 -0.5 —
net(3)
Research
and
developm… $ 85.3 $ 87.5 $ 69.0
on
non-GAAP
basis
Selling,
general
and
administ… $ 99.3 $ 91.2 $ 85.1
on
GAAP
basis
Stock-ba…
compensa…
and -32.6 -26.1 -24.8
related
payroll
taxes(1)
Amortiza…
of -13.6 -13.9 -14.5
acquired
intangib…
Acquisit…
related — — -1.3
costs,
net
Integrat…
related
(costs) -0.3 -0.5 0.8
income,
net
Other
charges, -1.3 -0.1 -3.8
net(3)
Selling,
general
and
administ… $ 51.5 $ 50.6 $ 41.5
on
non-GAAP
basis
Income
from
operatio… $ 359.8 $ 279.3 $ 6.7
on GAAP
basis
Stock-ba…
compensa…
and 146.7 50.1 46.5
related
payroll
taxes(1)
Amortiza…
of 32.8 33.5 34.4
acquired
intangib…
Acquisit…
related — — 1.3
costs,
net
Integrat…
related
costs 0.3 0.5 -0.8
(income),
net
Restruct…
and — 2.4 8.3
related
charges
Intangib…
assets — 2.5 —
write-off
Gain on
sale of -6.9 — —
business,
net(2)
Other
charges, 1.7 0.5 3.4
net(3)
Income
from
operatio… $ 534.4 $ 368.8 $ 99.8
on
non-GAAP
basis
Operating
margin on 42.3 % 36.6 % 18.7 %
non-GAAP
basis
Total
other
income
(expense… $ 10.5 $ -7,737.6 $ -1.5
net on
GAAP
basis
Loss on
debt — 7,756.6 —
extingui…
Induceme… — — 5.9
expense
Foreign
exchange
losses 6.7 2.2 -1.5
(gains),
net
Non-cash
interest 0.6 0.8 0.8
expense
Total
other
income, $ 17.8 $ 22.0 $ 3.7
net on
non-GAAP
basis
Income
(loss)
before
income $ 370.3 $ -7,458.3 $ 5.2
taxes on
GAAP
basis
Stock-ba…
compensa…
and 146.7 50.1 46.5
related
payroll
taxes(1)
Amortization of acquired intangibles 32.8 33.5 34.4
Acquisition related costs, net — — 1.3
Integration related costs (income), 0.3 0.5 -0.8
net
Intangible assets write-off — 2.5 —
Restructuring and related charges — 2.4 8.3
Gain on sale of business, net(2) -6.9 — —
Foreign exchange losses (gains), net 6.7 2.2 -1.5
Loss on debt extinguishment — 7,756.6 —
Inducement expense — — 5.9
Non-cash interest expense 0.6 0.8 0.8
Other charges, net(3) 1.7 0.5 3.4
Income before income taxes on
non-GAAP $ 552.2 $ 390.8 $ 103.5
basis
Income tax provision (benefit) on
GAAP $ 10.0 $ -296.6 $ 1.0
basis
Non-GAAP income tax reconciling 81.1 361.1 16.1
adjustments
Income tax provision on non-GAAP $ 91.1 $ 64.5 $ 17.1
basis
Net income (loss) on GAAP basis $ 360.3 $ -7,161.7 $ 4.2
Stock-based compensation and related 146.7 50.1 46.5
payroll taxes(1)
Amortization of acquired intangibles 32.8 33.5 34.4
Acquisition related costs, net — — 1.3
Integration related costs (income), 0.3 0.5 -0.8
net
Intangible assets write-off — 2.5 —
Restructuring and related charges — 2.4 8.3
Gain on sale of business, net(2) -6.9 — —
Loss on debt extinguishment — 7,756.6 —
Inducement expense — — 5.9
Foreign exchange losses (gains), net 6.7 2.2 -1.5
Non-cash interest expense 0.6 0.8 0.8
Other charges, net(3) 1.7 0.5 3.4
Non-GAAP income tax reconciling -81.1 -361.1 -16.1
adjustments
Net income on non-GAAP basis $ 461.1 $ 326.3 $ 86.4
Net income per share on non-GAAP $ 4.57 $ 3.23 $ 1.10
basis
Shares used in per share calculation
- 101.7 84.6 78.3
diluted on GAAP basis
Non-GAAP adjustment(4) -0.7 16.5 —
Shares used in per share calculation
- 101.0 101.1 78.3
diluted on non-GAAP basis
(1) Stock-based compensation and related payroll taxes for the three months
ended September 26, 2026 includes $89.4 million of equity award modification
associated with the retirement of certain executive announced during the quarter
and $14.2 million of payroll taxes on stock-based compensation.
(2) Gain on sale of business, net for the three months ended September 26, 2026
resulted from the sale of a certain product line for a total proceed of $12.3
million. The transaction comprised of assets with total book value of $5.1
million, together with associated license, supply, transition-service, and
facility arrangements. We incurred selling costs of $0.3 million.
(3) Other charges (income), net for the three months ended September 26, 2026
primarily relates to $1.3 million of legal fees in selling and general and
administrative expenses related to non-ordinary course legal matters and $1.2
million of certain process qualification costs in research and development
expenses associated with the ramp of our Greensboro, North Carolina facility,
offset in part by a $0.8 million credit related to units sold that were
previously written down.
(4) The adjustment for the three months ended September 26, 2026 represents the
impact of the capped call options. Our outstanding capped call options are anti-
dilutive under GAAP as they are specifically designed to mitigate the dilutive
impact of the 2032 Notes, such that no dilution will occur until the capped call
price is exceeded. Therefore, we reduced 0.7 million shares from the capped call
in the calculation of non-GAAP diluted shares in the three months ended
September 26, 2026 to provide investors with useful information in evaluating
our performance on a per share basis.
We calculate basic net income per share pursuant to the two-class method as a
result of the issuance of the Series A Convertible Preferred Stock (the
“Preferred Stock”) in March 2026. Our Preferred Stock represents a second class
of common stock for purposes of computing net income per share under the two-
class method as it is entitled to receive dividends on an as-converted basis in
the same manner as holders of common stock and does not have any material
preferential rights relative to our common stock.
As the Preferred Stock participates on an if-converted basis, and there are no
dividends, the income allocated to the two classes of stock converge and the
results are mathematically equal. Thus, basic and diluted net income per share
is calculated assuming the Preferred Stock have been converted into common
stock, and the related shares are included in the weighted average shares
outstanding.
LUMENTUM HOLDINGS INC.
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
(in millions, except per share data)
(unaudited)
Three
Months September June 27, September
Ended 26, 2026 2026 27, 2025
──────────────────────────────────────────────────────────────────────────────
GAAP net
income $ 360.3 $ -7,161.7 $ 4.2
(loss)
Loss on
debt — 7,756.6 —
extingui…
Interest 2.4 3.6 5.7
expense
Interest
and other -12.9 -22.6 -4.2
income,
net
Income
tax 10.0 -296.6 1.0
provision
(benefit)
Deprecia… 43.6 37.6 27.8
expense
Amortiza…
of 32.8 33.5 34.4
acquired
intangib…
EBITDA 436.2 350.4 68.9
Restruct…
and — 2.4 8.3
related
charges
Stock-ba…
compensa…
and 146.7 50.1 46.5
related
payroll
taxes
Acquisit…
related — — 1.3
costs,
net
Integrat…
related
costs 0.3 0.5 -0.8
(income),
net
Intangib…
asset — 2.5 —
write-off
Gain on
sale of -6.9 — —
business,
net
Other
charges, 1.7 0.5 3.4
net
Adjusted $ 578.0 $ 406.4 $ 127.6
EBITDA