10-QPeriod: Q1 FY2024

Lumentum Holdings Inc. Quarterly Report for Q1 Ended Sep 30, 2023

Filed November 8, 2023For Securities:LITE

Summary

Lumentum Holdings Inc. reported a significant decline in net revenue for the three months ended September 30, 2023, down 37.3% year-over-year to $317.6 million. This downturn was primarily driven by a substantial decrease in demand across both the Cloud & Networking and Industrial Tech segments, attributed to customers managing their inventory levels. Consequently, the company posted a net loss of $67.9 million, or $1.02 per diluted share, a considerable change from the modest net loss of $0.4 million in the prior year period. The company highlighted increased inventory excess and obsolescence charges, factory underutilization due to lower demand, and a less favorable product mix as key contributors to the sharp decline in gross margin to 24.1% from 39.7% in the comparable prior year quarter. Despite the challenging revenue environment, Research and Development expenses remained stable, indicating continued investment in future products. Management has also recently completed the acquisition of Cloud Light Technology Limited for approximately $750 million, aiming to strengthen its position in AI/ML and cloud networking markets.

Financial Highlights

49 data points
Beta

Revenue

$317.60M

0.2% Gross Margin

Net Income

-$67.90M

-0.2% Net Margin

EPS (Diluted)

$-1.02

Total Assets

$4.54B

Cash & Equivalents

$861.60M

Free Cash Flow

-$60.10M

Financial Statements
Beta
Revenue$317.60M
Gross Profit$76.70M
R&D Expenses$73.50M
SG&A Expenses$73.00M
Operating Expenses$157.50M
Operating Income-$80.80M
Interest Expense$9.70M
Net Income-$67.90M
EPS (Basic)$-1.02
EPS (Diluted)$-1.02
Shares Outstanding (Basic)66.70M
Shares Outstanding (Diluted)66.70M

Key Highlights

  • 1Net revenue for the quarter decreased by 37.3% to $317.6 million compared to the prior year quarter.
  • 2The company reported a net loss of $67.9 million, or $1.02 per diluted share, compared to a net loss of $0.4 million in the prior year.
  • 3Gross margin significantly compressed to 24.1% from 39.7% year-over-year, impacted by lower volumes, less favorable product mix, and increased inventory charges.
  • 4Both Cloud & Networking and Industrial Tech segments experienced significant revenue declines, down 36.2% and 40.1% respectively.
  • 5The company cited customer inventory management and demand reduction as primary reasons for the revenue drop.
  • 6Restructuring and related charges increased to $11.0 million from $9.3 million year-over-year.
  • 7Lumentum recently completed the acquisition of Cloud Light Technology Limited for approximately $750 million.

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