Lumentum Holdings Inc. Q3 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q3 revenue: $366.5M (flat sequentially; down 4.4% YoY).
  • Non-GAAP EPS: $0.29 (above midpoint of guidance).
  • Cloud & Networking segment: $313.8M (up 9.5% QoQ; up 7.1% YoY). This represents a record cloud data center revenue quarter, boosted by Cloud Light integration.
  • Industrial Tech revenue: $52.7M (down 34% QoQ; down 42% YoY), primarily due to seasonality, 3D sensing competition, and fiber laser customer inventory digestion.
  • Gross margins: Non-GAAP 32.6% (flat QoQ; down YoY on mix).

Key Business Drivers & Trends

  • Strong data center and AI-related demand continues to accelerate, particularly for high-speed photonics for 800G and 1.6T applications.
  • 100G EML laser chip revenue nearly tripled QoQ due to expanded Japan fab output.
  • 200G EML qualification progressing well; expected to significantly contribute to revenue starting in calendar 2025.
  • ZR/ZR+ coherent modules and tunable lasers experienced a notable demand uptick as inventories normalized.
  • Telecom remains a drag due to extended carrier inventory correction and slower telco spending. Management expects improvement by late calendar 2024.
  • Industrial ultrafast lasers grew over 40% QoQ despite broader segment declines.

Manufacturing & Capacity Expansion

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Operator: Good day, everyone, and welcome to the Lumentum Holdings' Third 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. At this time, 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 third 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, Executive Vice President and 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, macroeconomic trends, trends and expectations for our products and technologies, our end markets, market opportunities and customers, and our expected financial and operating 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 our SEC filings. We encourage you to review our most recent filings wit

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