10-K · August 17, 2026
Lumentum delivered a significant fiscal 2026 operating inflection, with revenue rising to $3,014.0 million, gross margin reaching approximately 41.7%, operating margin turning positive at approximately 17.4%, and…
Earnings analysis · 10-Q
LITE earnings analysis
Filed November 3, 2026 · Our reading of the company's report
The latest report
Lumentum delivered a strong quarter, with revenue of $1.263 billion, gross margin of 51.0%, operating margin of 28.5%, and non-GAAP diluted EPS of $4.57. Revenue and profitability increased materially versus both the…
Read full summary
Lumentum delivered a strong quarter, with revenue of $1.263 billion, gross margin of 51.0%, operating margin of 28.5%, and non-GAAP diluted EPS of $4.57. Revenue and profitability increased materially versus both the preceding quarter and comparable prior-year quarter, while liquidity remained substantial at $1.9796 billion and the revolver had no borrowings. The principal offset is the proposed Marvell merger, which introduces substantial approval, timing, fixed-exchange-ratio, and $2.9 billion termination-fee risks.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $4.57
What stood out
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Revenue accelerated sharply
Revenue was $1.263 billion, up approximately 25% from $1.01 billion in the immediately preceding quarter and approximately 137% from $534 million in the comparable prior-year quarter.
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Gross margin expanded materially
Gross margin expanded to 51.0%, versus 47.4% in the preceding quarter and 34.0% in the comparable prior-year quarter, an increase of 360 and 1,700 basis points, respectively.
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Operating leverage continued
Operating margin reached 28.5%, compared with 25.0% in the preceding quarter and 1.3% in the comparable prior-year quarter, improving by 350 and 2,720 basis points, respectively.
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EPS exceeded consensus
Non-GAAP diluted EPS was $4.57, exceeding the $4.14 consensus estimate by $0.43, or approximately 10.4%; GAAP diluted EPS was also reported at $3.54.
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Substantial liquidity and no revolver borrowings
The company reported $1.9796 billion of cash, cash equivalents, and short-term investments as of September 26, 2026, while its $400.0 million revolving credit facility had no borrowings outstanding.
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Strong near-term outlook
Management provided fiscal Q2 2027 revenue guidance of $1.575-$1.625 billion and non-GAAP diluted EPS guidance of $5.90-$6.20, implying continued sequential growth from the reported $1.263 billion of revenue and $4.57 of EPS.
What to watch
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Fixed-ratio merger consideration
The proposed Marvell transaction uses a fixed exchange ratio of 4.500 Marvell shares for each Lumentum share. Because the ratio is not adjusted for changes in either company's stock price, the value received by Lumentum holders can vary materially before closing.
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Merger approval and timing risk
The merger is subject to shareholder, antitrust, registration, listing, and other conditions, and either party may terminate if it is not completed by November 1, 2027, subject to possible extensions through August 1, 2028. The filing states that required approvals may be delayed, conditioned, or denied.
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Breakup fee and failed-deal risk
If the merger is terminated in certain circumstances, Lumentum may owe Marvell a $2.9 billion termination fee. The filing also states that transaction costs will continue to be incurred even if the merger is not completed.
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Foreign-exchange loss worsened
Foreign-exchange volatility became a headwind: the company recorded a $6.7 million net foreign-exchange loss for the three months ended September 26, 2026, versus a $1.5 million net gain in the comparable prior-year period.
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Bank liquidity concentration
The company held approximately $489.2 million of unrestricted operating cash with domestic and international financial institutions, creating exposure to loss of access if a financial institution fails or becomes illiquid.
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Potential FCC product restrictions
The filing adds risk from potential FCC restrictions on optical transceivers, which could require product redesigns or alternative suppliers and increase costs, delay deliveries, or reduce margins. The FCC had issued no final rule specifically addressing optical transceivers as of the filing.
Management's outlook
The earnings release provided fiscal Q2 2027 non-GAAP EPS guidance of $5.90-$6.20 and revenue guidance of $1.575-$1.625 billion. The 10-Q does not establish whether this outlook was raised, maintained, or lowered versus a prior outlook.
Earlier filings 2
10-Q · May 5, 2026
Lumentum Holdings reported an impressive Q3 2026 with revenues of $808.4 million, showing a 90.1% increase year-over-year. Despite a slight miss on revenue expectations, EPS of $2.37 surpassed estimates of $2.17, aided…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.