Lumentum Holdings Inc. (LITE) Earnings

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Dec 2026upcoming

Next quarter

Consensus is $4.60 EPS for Dec 2026 across 7 estimates, ranging $4.20 to $4.87.

LITE Sep 2026

Reported Nov 2, 2026 · after the close

: 1.57%
: Pending

: $3.82
: $3.76
: —
: $1.26B

Reported results

: $1.26B; from $533.80M
: 51.01%; from 34.00%
: $359.80M; from $6.70M
: 28.50%; from 1.26%
: $360.30M; from $4.20M
: $3.54; from $0.05

Highlights

Marvell deal reshapes the quarter: Marvell agreed to acquire Lumentum in an all-stock transaction at a fixed 4.500 Marvell shares per Lumentum share, implying an enterprise value of $115 billion and a 23.9% premium to the October 28 unaffected price; closing is expected in the first half of calendar 2028, subject to approvals.
Revenue accelerated sharply: Q1 FY2027 revenue was $1.263 billion, up 136.5% year over year and 56.2% from Q4 FY2026’s $808.4 million, as AI and cloud demand outpaced available supply.
Growth spanned components and systems: Components revenue rose 98.9% year over year to $754.2 million; Systems revenue increased 228.8% to $508.4 million. Optical circuit switches contributed more than $108 million.
Profitability expanded: Gross margin increased to 51.0% from 34.0% a year earlier; operating income was $359.8 million versus $6.7 million, and net income was $360.3 million versus $4.2 million.
EPS was slightly below consensus: The supplied headline result lists EPS of $3.76 versus consensus of $3.82, a 1.57% miss. The 10-Q reports GAAP diluted EPS of $3.54.
Capacity investment and working capital absorbed cash: Operating cash flow was $267.7 million, while capital expenditures were $229.8 million; cash and cash equivalents fell $771.3 million during the quarter to $1.272 billion.
Deal rationale is AI connectivity: The companies expect a combined addressable market of $550 billion and more than $1 billion in annual run-rate cost synergies; these are transaction projections, not current-quarter results.

Analysis

Lumentum’s Q1 FY2027 was defined by two developments: a dramatic AI- and cloud-led operating ramp and the announced agreement to be acquired by Marvell. Revenue of $1.263 billion rose 136.5% year over year from $533.8 million and 56.2% sequentially from $808.4 million. Operating income reached $359.8 million, versus $6.7 million a year earlier and $174.5 million in the prior quarter; net income was $360.3 million, compared with $4.2 million and $144.2 million, respectively. The supplied headline EPS of $3.76 came in 1.57% below the $3.82 consensus; separately, the 10-Q reports GAAP diluted EPS of $3.54.

The demand surge lifted gross margin to 51.0% from 34.0%, with higher factory utilization and a richer product mix contributing to the improvement. Components revenue reached $754.2 million and Systems $508.4 million, including more than $108 million of optical circuit switch revenue. The transaction now frames the outlook for Lumentum: shareholders would receive 4.500 Marvell shares per share, with an implied $115 billion enterprise value and an expected close in H1 2028. Meanwhile, growth required substantial investment: capex was $229.8 million, working-capital movements weighed on operating cash conversion, and cash ended the quarter at $1.272 billion.

Marvell transaction

Consideration: The fixed exchange ratio is 4.500 Marvell shares for each Lumentum share. The announced transaction implies $115 billion enterprise value, or approximately $1,132 per Lumentum share, and a 23.9% premium to the October 28 unaffected closing price.
Ownership and timing: Lumentum holders would own about 33% of the combined company on a fully diluted basis, with existing Marvell holders owning about 67%. The companies expect to close in the first half of calendar 2028, subject to shareholder, regulatory and other customary approvals.
Strategic and financial claims: Marvell and Lumentum say the combination would bring together electrical interconnect, switching and custom silicon with Lumentum’s lasers, transceivers, optical circuit switching and compound-semiconductor manufacturing. They estimate a $550 billion addressable market, see a path to more than $1 billion in annual run-rate cost synergies, and expect the deal to be accretive to Marvell non-GAAP EPS in year one after closing.

AI-led revenue growth

Components: Revenue grew 98.9% year over year to $754.2 million. Laser chips and assemblies drove most of the increase, supported by demand across intra-data-center, data-center-interconnect and long-haul applications; data-transport products supplied the remainder.
Systems: Revenue rose 228.8% to $508.4 million. Cloud transceiver revenue increased more than 266%, while optical circuit switch shipments contributed more than $108 million as the company continued expanding manufacturing capacity.
Demand and concentration: Management said AI and cloud demand was exceeding current supply and required allocation decisions. Two end customers accounted for 37% and 11% of revenue, respectively, compared with 22% and 21% a year earlier.

Margin and earnings

Gross margin: Gross profit increased to $644.0 million from $181.5 million, and gross margin expanded 17.0 percentage points to 51.0%. The company attributed the improvement to product mix and higher internal factory utilization, as well as lower acquired-intangible amortization.
Operating costs: Operating income rose to $359.8 million from $6.7 million. R&D expense increased 135.6% to $191.8 million, mainly reflecting higher stock-based compensation, including $89.4 million of accelerated expense associated with an executive’s retirement and consulting arrangement. Total stock-based compensation was $132.5 million, versus $42.4 million a year earlier.
Net income and EPS: Net income was $360.3 million versus $4.2 million a year ago. The quarter included a $37.0 million discrete tax benefit, primarily tied to stock-compensation vesting, and a $6.9 million gain on sale of a business. The supplied headline EPS figure was $3.76 versus $3.82 expected; GAAP diluted EPS in the 10-Q was $3.54.

Cash and capacity

Cash generation: Operating cash flow was $267.7 million, up from $57.9 million a year earlier, but below net income as receivables, inventory and prepayments increased. Receivables rose $105.4 million and inventories $114.2 million during the quarter.
Investment: Capital expenditures were $229.8 million, versus $76.2 million a year earlier, as Lumentum expanded manufacturing capacity. Property, plant and equipment, net, increased to $1.410 billion from $1.159 billion.
Cash and financing: Cash and cash equivalents declined $771.3 million to $1.272 billion. Financing cash outflow of $804.4 million included $493.3 million of convertible-note conversion payments and $306.9 million of tax payments related to net share settlement of restricted stock. Cash plus short-term investments totaled about $1.980 billion at quarter-end.

Lumentum Holdings Inc.

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