Lumentum Holdings Inc. Q3 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue reached a record $808 million, up 90% year-over-year and up approximately $140 million sequentially. This growth was driven primarily by transceivers, laser chips, and scale-across components.
  • Non-GAAP operating margin expanded to 32.2%, up 700 basis points sequentially and 2,140 basis points year-over-year, reflecting strong operating leverage and favorable product mix.
  • Non-GAAP gross margin reached 47.9%, up 540 basis points sequentially and 1,270 basis points year-over-year, with major contributions from data center laser chips and improved factory utilization.
  • Non-GAAP EPS was $2.37, above prior expectations.
  • Cash and short-term investments rose to $3.17 billion, largely due to NVIDIA’s direct investment.

Business Segment Performance

Components
  • Revenue: $533 million, up 20% sequentially and 77% year-over-year.
  • Narrow linewidth laser assemblies increased for the ninth straight quarter, up over 120% year-over-year.
  • Pump laser shipments increased 80% year-over-year. These products remain capacity constrained with demand outpacing supply by more than 30%.
  • Laser chip shipments doubled year-over-year; 200-gig EML revenue more than doubled sequentially.
  • Capacity remains fully allocated; Lumentum expects EML unit output to grow over 50% by December 2026 compared to December 2025.

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Operator: Good day, everyone, and welcome to the Lumentum Holdings Third Quarter Fiscal Year 2026 Earnings Call. [Operator Instructions] Please also note, today's event is being recorded for replay purposes. [Operator Instructions] At this time, I would like to turn the conference call over to Kathy Ta, Vice President of Investor Relations. Ms. Ta, please go ahead. Kathryn Ta: Thank you, Melissa, and welcome to Lumentum's Third Quarter Fiscal Year 2026 Earnings Call. This is Kathy Ta, Lumentum's Vice President of Investor Relations. Joining me today are Michael Hurlston, President and Chief Executive Officer; Wajid Ali, Executive Vice President and Chief Financial Officer; and Wupen Yuen, President, Global Business Units. Today's call will include forward-looking statements, including, without limitation, statements regarding our future operating results, strategies, trends and expectations for our products and technologies that are being made under the safe harbor of the Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our current expectations, particularly the risks set forth in our SEC filings under Risk Factors and elsewhere. We encourage you to review our most recent filings with the SEC, particularly the risk factors described in our 10-Q for the fiscal quarter ended December 27, 2025, and in our most recent 10-Q for the fiscal quarter ended March 28, 2026, to be f

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