10-QPeriod: Q1 FY2025

Lumentum Holdings Inc. Quarterly Report for Q1 Ended Sep 28, 2024

Filed November 8, 2024For Securities:LITE

Summary

Lumentum Holdings Inc. reported a net loss of $82.4 million, or $1.21 per share, for the three months ended September 28, 2024. This compares to a net loss of $67.9 million, or $1.02 per share, in the same period last year. Net revenue increased by 6.1% to $336.9 million, driven by a significant rise in the Cloud & Networking segment, largely due to AI/ML demand and the Cloud Light acquisition. However, the Industrial Tech segment saw a substantial revenue decline. The company's gross margin decreased year-over-year, impacted by a less profitable product mix, including higher sales of AI/ML-related products, and lower factory utilization. Despite the net loss, the company's cash and cash equivalents increased, reflecting positive operating and financing activities.

Financial Statements
Beta

Key Highlights

  • 1Net loss of $82.4 million ($1.21 per share) for the quarter, widening from a net loss of $67.9 million ($1.02 per share) in the prior year period.
  • 2Net revenue increased by 6.1% to $336.9 million, primarily driven by the Cloud & Networking segment's growth.
  • 3Cloud & Networking segment revenue rose 22.9% to $282.3 million, boosted by AI/ML demand and the Cloud Light acquisition.
  • 4Industrial Tech segment revenue declined 37.9% to $54.6 million due to market competition, macroeconomic factors, and customer inventory reduction.
  • 5Gross margin decreased to 23.1% from 24.1% in the prior year, impacted by product mix and lower factory utilization.
  • 6The company ended the quarter with $489.2 million in cash and cash equivalents, an increase from $436.7 million at the end of the previous quarter.

Frequently Asked Questions

For the three months ended September 28, 2024, Lumentum Holdings Inc. reported a net loss of $82.4 million, or $1.21 per share, and net revenue of $336.9 million. This represents a wider net loss compared to the same period last year, but an increase in net revenue.

The increase in Cloud & Networking revenue was primarily driven by higher demand from cloud and AI/ML customers, which contributed $71.0 million in increased revenue. This also includes revenue from the recently acquired Cloud Light business.

The Industrial Tech segment's revenue decreased due to higher market competition in the consumer end-market, a general slowdown in global macroeconomic factors, and customers working to reduce their previously accumulated inventory levels.

The gross margin for the quarter was 23.1%, down from 24.1% in the prior year. This decrease was attributed to a less profitable product mix, particularly from increased sales of AI/ML-related products, and lower factory utilization due to customers managing down inventory. Management expects gross margins to continue to be subject to variability and potential downward pressure due to competitive factors and market dynamics.