Lumentum Holdings Inc. Q1 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Record quarterly revenue of $506.8 million, up 20% sequentially and 13% year-over-year.
  • Revenue, EPS, and operating margin all exceeded guidance ranges.
  • Telecom demand remains exceptionally strong; Datacom and 3D sensing face near-term headwinds.
  • Company integrating NeoPhotonics and IPG Telecom acquisitions, expanding its Optical Communications portfolio.

Financial Highlights (Compared to Prior Periods)

  • Revenue: $506.8 million (up 20.1% vs. Q4; up 13% vs. Q1 last year).
  • Non-GAAP gross margin: 48.2% (down vs. prior quarter and year, driven by mix and NeoPhotonics integration).
  • Non-GAAP operating margin: 27.1% (down sequentially and YoY).
  • Non-GAAP EPS: $1.69 (top of guidance range).
  • Cash and short-term investments: $1.625 billion.
  • Share repurchases: 300,000 shares for $25.7 million in Q1.

Segment Performance

  • Optical Communications
    • Revenue: $453.4 million, up 22% sequentially.
    • Strong Telecom demand drove 67% YoY growth across Telecom/Datacom combined; 33% organic growth.
    • Record revenues in narrow-linewidth tunable lasers, edge tunables, and 400G+ coherent components.
    • ROADM revenue up 23% sequentially and 34% YoY.
    • Sharp demand constrained by persistent IC shortages (~$80M revenue impact per quarter).

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Operator: Good day, everyone, and welcome to the Lumentum Holdings First Quarter Fiscal Year 2023 Earnings Call. All participants will be in a listen-only mode. Please also note, today’s event is being recorded for replay purposes. [Operator Instructions] At this time, I'd like to turn the conference call over to Kathy Ta, Vice President of Investor Relations. Ms. Ta, please go ahead. Kathy Ta: Thank you, operator. Welcome to Lumentum's Fiscal First Quarter 2023 Earnings Call. This is Kathy Ta, Lumentum's Vice President of Investor Relations. Joining me today are Alan Lowe, President and Chief Executive Officer; Wajid Ali, Chief Financial Officer; and Chris Coldren, Senior Vice President and Chief Strategy and Corporate Development Officer. Today's call will include forward-looking statements, including statements regarding our expectations regarding our recent acquisition of NeoPhotonics, including market opportunity, expected synergies and financial and operating results and expectations regarding accretion, strategies of the combined company and benefits to customers and the markets in which we operate. The impact of COVID-19 on our business and continuing uncertainty in this regard, macroeconomic trends, trends and expectations for our products and technology, our markets, market opportunity and customers and our expected financial performance, including our guidance as well as statements regarding our future revenues, our financial model and our margin targets. These sta

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