Lumentum Holdings Inc. Q1 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q1 revenue: $317.6M, down 14% sequentially and down 37% year-over-year.
  • Non-GAAP EPS: $0.35, above midpoint of guidance.
  • Q1 non-GAAP gross margin: 34.9%, down sequentially and year-over-year due to product mix, underutilization, and lower revenue.
  • Cash and investments: $1.94B, down $69M sequentially due to facility purchase, pre-built inventory for NeoPhotonics consolidation, Japan tax payment, and Cloud Light acquisition expenses.

Business Segment Performance

Cloud & Networking (C&N)

  • Q1 revenue: $229.7M, down 19.8% sequentially and down 36.2% year-over-year.
  • Drivers of decline: inventory digestion at networking and telecom customers; continuing under-shipment vs. end-market demand.
  • Strength: robust demand for data center chips and Cloud Light’s intra–data center transceivers, especially 800G, offset downside.
  • Cloud Light acquisition expands Lumentum's served data center opportunity more than 5-fold; over 50% of Cloud Light’s latest quarterly transceiver revenue was from 800G products.
  • Lumentum expects Cloud & Networking shipments to grow in calendar 2024 as customer inventory normalizes.

Industrial Tech

  • Q1 revenue: $87.9M, up 4.3% sequentially, down 40.1% year-over-year.

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Operator: Good day, everyone, and welcome to the Lumentum Holdings First Quarter Fiscal Year 2024 Earnings Call. All participants will be in a listen-only mode. Please also note, today's event is being recorded for replay purposes. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] I would now like to turn the conference call over to Kathy Ta, Vice President of Investor Relations. Ms. Ta, please go ahead. Kathy Ta: Thank you, and welcome to Lumentum's fiscal first quarter 2024 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 and beliefs regarding recent acquisitions, including Cloud Light and NeoPhotonics; financial and operating results; macroeconomic trends; trends and expectations for our products and technology; our end markets; market opportunities and customers; and our expected financial performance, including our guidance as well as statements regarding our future revenues, financial model, and margin targets. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations, particularly the risk factors described in

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