Lumentum Holdings Inc. Q2 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue reached a record $665.5M, up more than 65% year-over-year (YoY) and above guidance.
  • Non-GAAP operating margin rose to 25.2%, improving 650 basis points sequentially and 1,730 bps YoY.
  • Non-GAAP EPS was $1.67, well above expectations.
  • Strong demand across AI-related optical markets, particularly cloud transceivers, optical circuit switches (OCS), and co-packaged optics (CPO).
  • Lumentum now views achieving $750M+ quarterly revenue as a baseline and expects $805M midpoint next quarter (Q3), an ~85% YoY increase.

Key Operational & Market Highlights

  • OCS performance exceeded expectations. The company surpassed its initial goal of a $10M OCS quarter one quarter early.
  • OCS backlog now exceeds $400M, mostly for shipment in the second half of calendar 2026.
  • Cloud transceivers saw strong Q2 outperformance and are on a sustainable ramp due to improved design execution and yields.
  • 1.6T transceiver transition is accelerating faster than expected; both silicon photonics and EML-based architectures are growing.
  • CPO bookings expanded with a new multi–hundred–million-dollar order for ultra-high‑power lasers, shipments expected starting 2027.

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Operator: Good day, everyone, and welcome to the Lumentum Holdings Second Quarter Fiscal Year 2026 Earnings Call. Please also note this event is being recorded for replay purposes. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press 9 to raise your hand and 6 to unmute. 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. Kathy Ta: Thank you, Kevin, and welcome to Lumentum's 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 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

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