10-QPeriod: Q3 FY2026

Lumentum Holdings Inc. Quarterly Report for Q3 Ended Mar 28, 2026

Filed May 6, 2026For Securities:LITE

Summary

Lumentum Holdings Inc. (LITE) reported a significant turnaround in its financial performance for the nine months ended March 28, 2026, compared to the same period last year. Net revenue more than doubled year-over-year, driven by robust demand in both the Components and Systems segments, particularly from AI/ML and cloud data center customers. The company achieved substantial improvements in gross profit and turned an operating loss into a significant operating income. This strong performance was bolstered by a substantial increase in cash and cash equivalents, primarily due to a $2 billion private placement of Series A Convertible Preferred Stock and the issuance of 2032 Notes. The company has also been actively managing its debt structure, repurchasing a portion of its 2026 Notes and issuing new convertible notes. The strategic focus remains on investing in new technologies and manufacturing capacity to meet the growing demand in its key markets. While facing some macroeconomic and trade-related uncertainties, Lumentum's improved financial health and strong market position in essential optical and photonic products present a positive outlook for investors.

Financial Highlights

47 data points
Beta

Revenue

$808.40M

44.2% Gross Margin

Net Income

$144.20M

17.8% Net Margin

EPS (Diluted)

$1.50

Total Assets

$7.03B

Cash & Equivalents

$2.62B

Free Cash Flow

$79.10M

Financial Statements
Beta
Revenue$808.40M
Gross Profit$357.00M
R&D Expenses$90.60M
SG&A Expenses$90.80M
Operating Expenses$182.50M
Operating Income$174.50M
Net Income$144.20M
EPS (Basic)$1.99
EPS (Diluted)$1.50
Shares Outstanding (Basic)71.50M
Shares Outstanding (Diluted)96.20M

Key Highlights

  • 1Net revenue for the nine months ended March 28, 2026, increased significantly to $2,007.7 million, up 72.4% from $1,164.3 million in the prior year period.
  • 2Gross profit surged by 159.5% to $778.6 million for the nine months ended March 28, 2026, with gross margin improving to 38.8% from 25.8% in the prior year period.
  • 3The company reported income from operations of $245.5 million for the nine months ended March 28, 2026, a substantial improvement from a loss of $171.7 million in the prior year period.
  • 4Net income available to common shareholders was $225.7 million for the nine months ended March 28, 2026, a significant turnaround from a net loss of $187.4 million in the prior year period.
  • 5Cash and cash equivalents significantly increased to $2,617.8 million as of March 28, 2026, up from $520.7 million as of June 28, 2025, bolstered by financing activities including a $2 billion Series A Convertible Preferred Stock issuance and $1.25 billion in 2032 Notes.
  • 6The company repurchased approximately $581.1 million aggregate principal amount of its 2026 Convertible Senior Notes.
  • 7The company reported a gain on sale of facility of $34.9 million in the prior year period (nine months ended March 29, 2025).

Frequently Asked Questions

For the nine months ended March 28, 2026, Lumentum's net revenue reached $2,007.7 million, a 72.4% increase from $1,164.3 million in the prior year period. This growth was primarily driven by a $560.3 million increase in Components revenue and a $283.1 million increase in Systems revenue. The company attributed this to strong demand for laser chip and laser assembly products supporting intra-data center, data center interconnect, and long-haul applications, as well as increased shipments of cloud transceiver product lines.

Lumentum demonstrated significant profitability improvements. Gross profit increased by 159.5% to $778.6 million for the nine months ended March 28, 2026, with gross margin expanding to 38.8% from 25.8% in the prior year period. This improvement was driven by lower manufacturing costs as a percentage of revenue due to higher factory utilization, a favorable product mix shift towards higher-margin products, and a decrease in the amortization of acquired intangibles as a percentage of revenue.

During the nine months ended March 28, 2026, Lumentum raised substantial capital through financing activities. Key transactions included the issuance of Series A Convertible Preferred Stock for $2.0 billion, the issuance of $1.25 billion in 2032 Convertible Senior Notes, and the repurchase of approximately $581.1 million aggregate principal amount of its 2026 Convertible Senior Notes. These activities significantly increased the company's cash position.

Lumentum is experiencing increasing demand, particularly from AI and cloud customers, which is outpacing current supply. To address this, the company is investing in expanding manufacturing capacity both internally and with contract manufacturers. They also note that some customers have normalized inventory levels, leading to increased demand.