- Net revenue of $336.9 million
- GAAP gross margin of 23.1%; Non-GAAP gross margin of 32.8%
- GAAP operating loss of 24.5%; Non-GAAP operating margin of
3.0%
- GAAP diluted net loss per share of $1.21; Non-GAAP diluted net
income per share of $0.18
Lumentum Holdings Inc. (“Lumentum” or the “Company”) today
reported results for its fiscal first quarter ended September 28,
2024.
“In the first quarter, we exceeded the high end of our guidance
for both revenue and earnings per share,” said Alan Lowe, President
and CEO. “We set a new record for datacom laser chip orders,
including substantial 200G EML orders, reflecting strong demand
from multiple customers, including an AI infrastructure customer.
Based on expanding cloud demand and improving trends in the broader
networking market, we expect double-digit sequential revenue growth
in the second quarter.”
Mr. Lowe added, “We advanced our strategy to expand and
diversify our cloud and AI business. We secured an additional
hyperscale transceiver customer with a new qualification and
initial volume order. This is beyond the new award we highlighted
last quarter. We expect to start shipping volume production against
these new orders in the first half of calendar 2025, and they will
ramp through the year, consistent with the revenue target we set
out previously.”
Fiscal First Quarter Highlights:
Net revenue for the fiscal first quarter of 2025 was $336.9
million, with GAAP net loss of $82.4 million, or $1.21 per diluted
share. Net revenue for the fiscal fourth quarter of 2024 was $308.3
million, with GAAP net loss of $252.5 million, or $3.72 per diluted
share. Net revenue for the fiscal first quarter of 2024 was $317.6
million, with GAAP net loss of $67.9 million, or $1.02 per diluted
share.
Non-GAAP net income for the fiscal first quarter of 2025 was
$12.2 million, or $0.18 per diluted share. Non-GAAP net loss for
fiscal fourth quarter of 2024 was $8.9 million, or $0.13 per
diluted share. Non-GAAP net income for the first quarter of 2024
was $16.1 million, or $0.24 per diluted share(1).
The Company held $916.1 million in total cash, cash equivalents,
and short-term investments at the end of the fiscal first quarter
of 2025, up $29.1 million from the end of the fiscal fourth quarter
of 2024.
Financial Overview – Fiscal First
Quarter Ended September 28, 2024
GAAP Results ($ in
millions)
Q1
Q4
Q1
Change
FY 2025
FY 2024
FY 2024
Q/Q
Y/Y
Net revenue
$
336.9
$
308.3
$
317.6
9.3
%
6.1
%
GAAP gross margin
23.1
%
16.6
%
24.1
%
650 bps
(100) bps
GAAP operating loss
(24.5
)%
(43.3
)%
(25.4
)%
1,880 bps
90 bps
Non-GAAP Results ($ in
millions)
Q1
Q4
Q1
Change
FY 2025
FY 2024 (1)
FY 2024 (1)
Q/Q
Y/Y
Net revenue
$
336.9
$
308.3
$
317.6
9.3
%
6.1
%
Non-GAAP gross margin
32.8
%
27.8
%
32.8
%
500 bps
— bps
Non-GAAP operating margin
3.0
%
(5.1
)%
0.6
%
810 bps
240 bps
Net Revenue by Segment ($ in
millions)
Q1
% of
Q4
Q1
Change
FY 2025
Net Revenue
FY 2024
FY 2024
Q/Q
Y/Y
Cloud & Networking
$
282.3
83.8
%
$
254.7
$
229.7
10.8
%
22.9
%
Industrial Tech
54.6
16.2
%
53.6
87.9
1.9
%
(37.9
)%
Total
$
336.9
100.0
%
$
308.3
$
317.6
9.3
%
6.1
%
(1) During the first fiscal quarter of
2025, the Company refined its methodology to report non-GAAP
measures. The change does not impact the Company’s financial
position, cash flows, or GAAP consolidated results of operations.
Prior period non-GAAP financial measures presented in this press
release have been recast to conform to the current
presentation.
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 fiscal second quarter
2025:
- Net revenue in the range of $380 million to $400 million
- Non-GAAP operating margin of 5.5% to 7.5%
- Non-GAAP diluted earnings per share of $0.30 to $0.40
We have not provided reconciliations from GAAP to non-GAAP
measures or the equivalent GAAP measure for non-GAAP measures in
our outlook, as they cannot be provided without unreasonable
effort. A large portion of non-GAAP adjustments, such as
restructuring charges, stock-based compensation, non-GAAP income
tax reconciling adjustments, acquisition related costs, and other
costs and contingencies unrelated to current and future operations
are by their nature highly volatile and we have low visibility as
to the range that may be incurred in the future.
Related Announcement and Conference Call
Lumentum will host a conference call today, November 7, 2024, at
2:00 pm PT / 5:00 pm ET to discuss its fiscal first quarter
results. A live webcast of the call will be available in the
Investors section of the Lumentum website at
http://investor.lumentum.com. To listen to the live conference
call, dial (833) 470-1428 or (404) 975-4839 and reference the
conference ID 013162. Supporting materials outlining the Company’s
latest financial results will be posted on
http://investor.lumentum.com under the “Events and Presentations”
section concurrently with this earnings press release. Lumentum has
used, and intends to continue to use, its Investor Relations
website as means of disclosing material nonpublic information and
for complying with its disclosure obligations under Regulation FD.
This press release is being furnished as an exhibit to a Current
Report on Form 8-K filed with the Securities and Exchange
Commission and will be available at http://www.sec.gov/.
About Lumentum
Lumentum (NASDAQ: LITE) is a market-leading designer and
manufacturer of innovative optical and photonic products enabling
optical networking and laser applications worldwide. Lumentum
optical components and subsystems are part of virtually every type
of telecom, enterprise, and data center network. Lumentum lasers
enable advanced manufacturing techniques and diverse applications
including next-generation imaging and sensing capabilities.
Lumentum is headquartered in San Jose, California with R&D,
manufacturing, and sales offices worldwide. For more information,
visit www.lumentum.com and follow Lumentum on LinkedIn, X (formerly
known as Twitter), Facebook, Instagram and YouTube.
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 our belief and expectations with respect to
our markets, customers and industry, any anticipation or guidance
as to demand for our products and technology from our customers,
including drivers of that demand, orders, and timing of fulfilling
orders, statements regarding our product roadmaps and investments,
statements regarding future revenue and revenue growth and trends
in our markets, and our guidance with respect to future net
revenue, non-GAAP diluted earnings per share, and non-GAAP
operating margins, 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 in banking and financial
services sectors, inflationary pressures, changes in the political
or economic environment, such as geopolitical conflicts, war, trade
and export restrictions and the imposition of tariffs or other
duties, and the effect of such market disruptions on demand for our
products, technology spending by our customers 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) 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; (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; and (j)
failure to successfully integrate Cloud Light into our business or
that we will not achieve the expected benefits. For more
information on these and other risks, please refer to the "Risk
Factors" section included in the Company’s Annual Report on Form
10-K for the fiscal year ended June 29, 2024 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 28, 2024 to be filed
with the SEC. 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.
LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in millions, except per share
data)
(unaudited)
Three Months Ended
September 28, 2024
September 30, 2023
Net revenue
$
336.9
$
317.6
Cost of sales
236.5
222.9
Amortization of acquired developed
intangibles
22.5
18.0
Gross profit
77.9
76.7
Operating expenses:
Research and development
74.3
73.5
Selling, general and administrative
76.3
73.0
Restructuring and related charges
9.7
11.0
Total operating expenses
160.3
157.5
Loss from operations
(82.4
)
(80.8
)
Interest expense
(5.5
)
(9.7
)
Other income, net
8.7
21.2
Loss before income taxes
(79.2
)
(69.3
)
Income tax provision (benefit)
3.2
(1.4
)
Net loss
$
(82.4
)
$
(67.9
)
Net loss per share:
Basic
$
(1.21
)
$
(1.02
)
Diluted
$
(1.21
)
$
(1.02
)
Shares used to compute net loss per
share:
Basic
68.3
66.7
Diluted
68.3
66.7
LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in millions, except per share
data)
(unaudited)
September 28, 2024
June 29, 2024
ASSETS
Current assets:
Cash and cash equivalents
$
489.2
$
436.7
Short-term investments
426.9
450.3
Accounts receivable, net
198.5
194.7
Inventories
403.3
398.4
Prepayments and other current assets
118.3
110.0
Total current assets
1,636.2
1,590.1
Property, plant and equipment, net
638.4
572.5
Operating lease right-of-use assets,
net
35.7
72.8
Goodwill
1,060.9
1,055.8
Other intangible assets, net
573.9
617.5
Deferred tax asset
12.5
10.7
Other non-current assets
12.0
12.5
Total assets
$
3,969.6
$
3,931.9
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
163.1
$
126.3
Accrued payroll and related expenses
42.0
36.1
Accrued expenses
39.7
52.4
Current portion of long-term debt
10.8
—
Operating lease liabilities, current
11.9
13.4
Other current liabilities
37.6
41.1
Total current liabilities
305.1
269.3
Long-term debt
2,569.2
2,503.2
Operating lease liabilities,
non-current
29.8
43.0
Deferred tax liability
53.4
55.7
Other non-current liabilities
116.2
103.4
Total liabilities
3,073.7
2,974.6
Stockholders’ equity:
Common stock, $0.001 par value, 990
authorized shares, 68.6 and 67.9 shares issued and outstanding as
of September 28, 2024 and June 29, 2024, respectively
0.1
0.1
Additional paid-in capital
1,853.7
1,835.0
Accumulated deficit
(969.5
)
(887.1
)
Accumulated other comprehensive income
11.6
9.3
Total stockholders’ equity
895.9
957.3
Total liabilities and stockholders’
equity
$
3,969.6
$
3,931.9
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, interest and
other income (expense), net, income before income taxes, provision
for income taxes, net income (loss), 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, these measures may be
different from non-GAAP measures used by other companies, limiting
their usefulness for comparison purposes. 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. 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. Further, these non-GAAP
financial measures may not be comparable to similarly titled
measurements reported by other companies.
Our non-GAAP measures used in this press release exclude (i)
stock-based compensation, (ii) acquisition related stock-based
compensation, (iii) acquisition related costs, (iv) amortization of
acquired intangibles, (v) restructuring and related charges, (vi)
foreign exchange (gains) losses, net, (vii) non-cash interest
expense on convertible notes, (viii) intangible assets write-off,
(ix) integration related costs, (x) non-GAAP income tax reconciling
adjustments, and (xi) other charges or income related to
non-recurring activities.
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 the fiscal first quarter of 2025 is
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 with respect to historical periods 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 Ended
September 28, 2024
June 29, 2024 (1)
September 30, 2023 (1)
Gross profit on GAAP basis
$
77.9
$
51.3
$
76.7
Stock-based compensation
9.7
8.2
6.0
Amortization of acquired intangibles
22.5
22.1
18.0
Integration related costs
1.2
1.9
3.3
Other charges (income), net
(0.9
)
2.1
0.3
Gross profit on non-GAAP basis
$
110.4
$
85.6
$
104.3
Gross margin on non-GAAP basis
32.8
%
27.8
%
32.8
%
Research and development on GAAP
basis
$
74.3
$
73.2
$
73.5
Stock-based compensation
(9.3
)
(8.0
)
(10.3
)
Amortization of acquired intangibles
(0.4
)
(0.4
)
(0.3
)
Acquisition related costs
—
—
(0.3
)
Integration related costs (reversal)
—
—
(0.4
)
Intangible asset write-off
(1.9
)
—
—
Other income (charges), net
—
0.1
(0.7
)
Research and development on non-GAAP
basis
$
62.7
$
64.9
$
61.5
Selling, general and administrative on
GAAP basis
$
76.3
$
74.9
$
73.0
Stock-based compensation
(16.6
)
(14.3
)
(15.8
)
Amortization of acquired intangibles
(18.8
)
(19.4
)
(10.7
)
Acquisition related costs
—
0.2
(3.7
)
Integration related costs
(2.2
)
(2.2
)
(2.3
)
Other (charges) income, net
(1.0
)
(2.7
)
0.3
Selling, general and administrative on
non-GAAP basis
$
37.7
$
36.5
$
40.8
Loss from operations on GAAP
basis
$
(82.4
)
$
(133.4
)
$
(80.8
)
Stock-based compensation
35.6
30.5
32.1
Amortization of acquired intangibles
41.7
41.9
29.0
Acquisition related costs
—
(0.2
)
4.0
Integration related costs
3.4
4.1
6.0
Restructuring and related charges
9.7
36.6
11.0
Intangible asset write-off
1.9
—
—
Other charges, net
0.1
4.7
0.7
Income from operations on non-GAAP
basis
$
10.0
$
(15.8
)
$
2.0
Operating margin on non-GAAP basis
3.0
%
(5.1
)%
0.6
%
Interest and other income, net on GAAP
basis
$
3.2
$
5.9
$
11.5
Foreign exchange (gains) losses, net
0.7
(1.2
)
0.4
Non-cash interest expense on convertible
notes and other income and expenses, net
0.7
0.7
4.9
Interest and other income, net on
non-GAAP basis
$
4.6
$
5.4
$
16.8
Loss before income taxes on GAAP
basis
$
(79.2
)
$
(127.5
)
$
(69.3
)
Stock-based compensation
35.6
30.5
32.1
Acquisition related costs
—
(0.2
)
4.0
Integration related costs
3.4
4.1
6.0
Amortization of acquired intangibles
41.7
41.9
29.0
Restructuring and related charges
9.7
36.6
11.0
Intangible asset write-off
1.9
—
—
Foreign exchange (gains) losses, net
0.7
(1.2
)
0.4
Non-cash interest expense on convertible
notes and other income and expenses, net
0.7
0.7
4.9
Other charges, net
0.1
4.7
0.7
Income (Loss) before income taxes on
non-GAAP basis
$
14.6
$
(10.4
)
$
18.8
Income tax provision (benefit) on GAAP
basis
$
3.2
$
125.0
$
(1.4
)
Non-GAAP income tax reconciling
adjustments
(0.8
)
(126.5
)
4.1
Income tax provision (benefit) on
non-GAAP basis
$
2.4
$
(1.5
)
$
2.7
Net loss on GAAP basis
$
(82.4
)
$
(252.5
)
$
(67.9
)
Stock-based compensation
35.6
30.5
32.1
Acquisition related costs
—
(0.2
)
4.0
Integration related costs
3.4
4.1
6.0
Amortization of acquired intangibles
41.7
41.9
29.0
Restructuring and related charges
9.7
36.6
11.0
Intangible asset write-off
1.9
—
—
Foreign exchange (gains) losses, net
0.7
(1.2
)
0.4
Non-cash interest expense on convertible
notes and other income and expenses, net
0.7
0.7
4.9
Non-GAAP income tax reconciling
adjustments
0.8
126.5
(4.1
)
Other charges, net
0.1
4.7
0.7
Net income (loss) on non-GAAP
basis
$
12.2
$
(8.9
)
$
16.1
Net income (loss) per share on non-GAAP
basis
$
0.18
$
(0.13
)
$
0.24
Shares used in per share calculation -
diluted on GAAP basis
68.3
67.8
66.7
Non-GAAP adjustment (2)
0.8
—
0.3
Shares used in per share calculation -
diluted on non-GAAP basis
69.1
67.8
67.0
(1) During the first fiscal quarter of
2025, the Company refined its methodology to report non-GAAP
measures. The change does not impact the Company’s financial
position, cash flows, or GAAP consolidated results of operations.
Prior period non-GAAP financial measures and the associated GAAP to
non-GAAP reconciliations presented in this press release have been
recast to conform to the current presentation.
(2) Shares used for net income per share
on non-GAAP basis represent the diluted share count that would have
been used for GAAP purposes if GAAP results were in a profit
position. Therefore, the adjustment represents the net incremental
dilutive shares from employee equity programs in accordance with
the treasury stock method. In September 2024, we modified our
outstanding convertible debt instruments by irrevocably electing to
settle the face value in cash. Therefore, notwithstanding the fact
that we had net income on a non-GAAP basis, there is no dilution in
our non-GAAP diluted share count from our convertible debt
instruments under the if-converted method, as the conversion rate
exceeded the average market value of our stock.
LUMENTUM HOLDINGS INC.
RECONCILIATION OF GAAP NET
INCOME TO ADJUSTED EBITDA
(in millions, except per share
data)
(unaudited)
Three Months Ended
September 28, 2024
June 29, 2024 (1)
September 30, 2023 (1)
GAAP net loss
$
(82.4
)
$
(252.5
)
$
(67.9
)
Interest and other expense, net
(3.2
)
(5.9
)
(11.5
)
Income tax provision (benefit)
3.2
125.0
(1.4
)
Depreciation
27.0
28.2
28.2
Amortization of acquired intangibles
41.7
41.9
29.0
EBITDA
(13.7
)
(63.3
)
(23.6
)
Restructuring and related charges
9.7
36.6
11.0
Stock-based compensation
35.6
30.5
32.1
Acquisition related costs
—
(0.2
)
4.0
Integration related costs
3.4
4.1
6.0
Intangible asset write-off
1.9
—
—
Other charges (gains), net
0.1
3.2
(3.5
)
Adjusted EBITDA
$
37.0
$
10.9
$
26.0
(1) During the first fiscal quarter of
2025, the Company refined its methodology to report non-GAAP
measures. The change does not impact the Company’s financial
position, cash flows, or GAAP consolidated results of operations.
Prior period non-GAAP financial measures and the associated GAAP to
non-GAAP reconciliations presented in this press release have been
recast to conform to the current presentation.
Category: Financial
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241107050743/en/
Investors: Kathy Ta, (408) 750-3853;
investor.relations@lumentum.com
Media: Noël Bilodeau, 408-439-2140;
noel.bilodeau@lumentum.com
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