Lumentum Holdings Inc. Q2 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Highlights

  • Record quarterly results across multiple metrics including revenue, non-GAAP gross margin, operating margin, and EPS.
  • Net revenue reached $478.8 million, up 6% sequentially and 5% year-over-year.
  • Non-GAAP gross margin exceeded 53% for the first time (53.4%), up 140 basis points sequentially and 600 basis points year-over-year.
  • Non-GAAP operating margin hit 35.5%, up 180 basis points sequentially and 670 basis points year-over-year.
  • Non-GAAP EPS rose to $1.99; GAAP EPS was $1.06.
  • Cash and short-term investments increased to $1.7 billion, up $90 million from Q1.
  • Coherent acquisition announced, expected to expand market opportunities across photonics, lasers, EV supply chains, semiconductor manufacturing, and aerospace/defense.

Business Segment Performance

Optical Communications
  • Revenue: $449.1 million, up 5% sequentially and 10% year-over-year.
  • Growth driven by ROADMs, 400G/600G/800G coherent components, DCO modules, and submarine products.
  • Gross margin improved to 53.8%, up 130 basis points sequentially and 580 basis points year-over-year.
  • Telecom/Datacom revenue grew 10% sequentially and 7% year-over-year; excluding divested lines, revenue grew 17% year-over-year.
  • Malaysia contract-manufacturing shutdown impacted revenue by ~$6 million.

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Operator: Good day, everyone. And welcome to the Lumentum Second Quarter Fiscal Year 2021 Earnings Call. All participants will be in a listen-only mode. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Jim Fanucchi of Darrow Associates. Sir, please go ahead. Jim Fanucchi: Thank you, operator. Welcome to the Lumentum’s second quarter fiscal year 2021 earnings call. This is Jim Fanucchi from Darrow Associates, assisting Lumentum with its Investor Relations. Joining the call today from the company's management team, we have Alan Lowe, President and Chief Executive Officer; Wajid Ali, Chief Financial Officer, and Chris Coldren, Senior Vice President of Strategy and Corporate Development. Today's call will include forward-looking statements, including statements regarding the markets in which we operate and our position in such markets, the impact of COVID-19 and responsive actions thereto on our business and continuing uncertainty in this regard, trends and expectations for our products and technology, our markets, market opportunity and customers, our proposed acquisition of Coherent, and our expected financial performance, including our guidance as well as statements regarding our future revenues, our financial model and our 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 i

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