LITE US S&P 500NASDAQ-100Russell 1000 Earnings call · transcribed from the recording
Lumentum (LITE) · Q2 2026 results and valuation
Share price: $648.06 · 2026-11-11
Lumentum provides optical and photonic products, including laser chips, optical modules, and industrial lasers for use in telecommunications, data centers, and manufacturing. The company supplies components and systems to customers in the cloud, artificial intelligence, and industrial sectors. It operates globally with manufacturing facilities in North America, Asia-Pacific, and Europe. Source: 10-K annual report (2026-08-17)
Results Q2 2026 vs Q1 2026 · previous quarter · fiscal Q4 2026 · published 11 Aug 2026 and 5 May 2026
Net income turned to a loss from a profit last quarter. Management sounded upbeat, in its script and in answers to analysts.
1 · Numbers
Turned loss
Net income vs Q1 2026
Outlook given
Net income -7.16B vs 144.2M
Revenue +24.5%
2 · How management spoke
Upbeat
More upbeat than 73% of company calls
Answers to analysts: typical, in line with the script.
Similar to last call.
3 · What stood out
Due to acceleration in AI revenue, Lumentum's Q1 revenue guidance midpoint reaches the $1.25 billion target more than one quarter ahead of schedule.
Valuation
Is Lumentum undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2026-06-27), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 19.5% growth a year (3-year revenue growth), the model's fair value is $153.22 a share — the stock trades 323% above it. Today's price assumes 39.7% growth a year.
Current price
$648.06
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+39.7% for 10 yrs
Fair value / share
$153.22
Buy below
$114.91
Price vs fair value
Overvalued >200%
Price vs buy-below price
Overvalued >200%
Read between the lines
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Guidance
Due to acceleration in AI revenue, the Q1 revenue guidance midpoint reaches the $1.25 billion target more than one quarter ahead of schedule.
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Figure
Components revenue reached $649 million in the fourth quarter, reflecting a 22% sequential and 103% year-over-year growth increase.
Source quote
“Components revenue for the fourth quarter was $649 million, reflecting 22% sequential and 103% year-over-year growth increases.”
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Figure
Revenue rose 109% year-over-year to $1.01 billion, marking the eighth consecutive quarter of top line growth.
Source quote
“Revenue surged 109% year-over-year to $1.01 billion, marking our eighth consecutive quarter of top line growth.”
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Figure
200-gig EMLs now account for over 25% of total EML revenue as their momentum is accelerating rapidly.
Source quote
“Momentum for our 200-gig EMLs is also accelerating rapidly, now accounting for over 25% of total EML revenue.”
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Figure
Lumentum reached a record quarterly revenue of a $1.25 billion midpoint, which reflects more than 130% year-over-year growth.
Source quote
“The $1.25 billion midpoint reflects more than 130% year-over-year growth, setting yet another all-time quarterly revenue record for Lumentum.”
4 more
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Figure
The operating margin expanded by more than 2,100 basis points year-over-year at the midpoint.
Source quote
“At the midpoint, this operating margin represents an expansion of more than 2,100 basis points year-over-year.”
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Key theme
The company expects to become the number one supplier and gain momentum in OCS shipments in early '27.
Source quote
“So I would expect sometime in early '27 that we cross over and be the #1 supplier and actually have momentum from there in terms of our OCS shipments.”
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Key theme
LITE expects a fourfold increase in pump laser shipments over the next several quarters to meet escalating demand.
Source quote
“We continue to expect a fourfold increase in our pump laser shipments over the next several quarters to meet this escalating demand.”
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Figure
LITE reduced its debt by $1.1 billion, which is approximately 35% of its outstanding convertible debt.
Source quote
“This action reduces our debt by $1.1 billion or approximately 35% of our outstanding convertible debt.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“Meanwhile, profitability across our transceiver lines continues to improve, driven by gains in both yield and capacity utilization as well as the initial rollout of higher ASP 1.6T transceivers.”
“Our family of NPO and CPO lasers utilizes common design and process know-how to achieve industry-leading efficiency across 120 milliwatt, 150-milliwatt and 400-milliwatt output levels.”
“We're seeing strong NPO momentum across multiple high-velocity engagements using our differentiated laser chips.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-06-27)
| Metric | Q2 2026period end 2026-06-27 | Q1 2026period end 2026-03-28 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 1.01B | 808.4M | +24.5% | 480.7M | +109.3% |
| Gross profit | 477.3M | 357.0M | +33.7% | 159.9M | +198.5% |
| Operating income | 279.3M | 174.5M | +60.1% | -8.4M | Turned profit |
| Net income | -7.16B | 144.2M | Turned loss | 213.3M | Turned loss |
| EPS | -95.55 | 1.50 | Turned loss | 3.09 | Turned loss |
| P/E | 12-mo loss | 123.7 | — | 256.1 | — |
Topics
Most discussed now
- While Lumentum experienced broad-based success, some of its previously highlighted growth drivers are just starting to layer in.
- Lumentum seems to be doing quite a bit better.
- Lumentum is probably pretty comfortable just given its lead in arrangement with the Japanese supplier and now of the announced deal...
- The width of the spec is very narrow, and that results in far better transceiver yields for the customers that...
- Lumentum will come out with some new financial targets, probably at the next OFC.
Faded since Q1 2026
- Dropped In particular, as Lumentum expands the CPO horizon, it is going to need that vertical integration strategy that you asked...
- Fading WSS keeps traffic in the optical domain bypassing the latency of electrical buffers while enabling the high port counts essential...
- Fading To enable Lumentum provides critical hardware components that provide high-density optical interconnects while meeting aggressive power and…
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Material agreement; Director or officer change; Regulation FD disclosure · SEC 8-K
- Results of operations · SEC 8-K
- Results of operations · SEC 8-K
Lumentum Holdings reported net revenue of $1.01 billion for the fourth quarter of fiscal year 2026, up 109.3% compared to $480.7 million in the fourth quarter of fiscal year 2025.
- Director or officer change · SEC 8-K
Executive Vice President Vincent Retort announced his retirement effective October 2026 and agreed to provide consulting services for a two-year term with continued vesting of his equity awards.
- Unregistered share sale · SEC 8-K
Lumentum Holdings Inc. entered into agreements to deliver approximately 5.0 million shares of common stock in exchange for approximately $650.4 million of its 0.50% Convertible Senior Notes due 2028.
- Results of operations · SEC 8-K
Lumentum Holdings Inc. reported net revenue of $808.4 million for the third quarter of fiscal year 2026, up 90.1% from $425.2 million in the same period of the previous year.
- Unregistered share sale · SEC 8-K
Lumentum Holdings Inc. entered into exchange agreements to deliver approximately 5.7 million shares of common stock for approximately $264.8 million of 2026 Notes and $209.8 million of 2029 Notes.
- Unregistered share sale; Articles or bylaws amended; Regulation FD disclosure · SEC 8-K
NVIDIA announced a multi-year strategic partnership and a $2 billion investment in Lumentum to develop advanced optics technology and expand U.S.-based manufacturing capacity.
Balance sheet & ownership
From SEC filings; short interest is FINRA data via Yahoo. Collected 2026-11-08.
Cash & runway
Cash & equivalents
$1.27B
2026-09-26
Short-term investments
$707.4M
total $1.98B
Implied runway
—
operating cash flow positive over the TTM window
Dilution
weighted-average basic shares, per quarter. Change: +31.6% YoY.
| Quarter | Shares |
|---|---|
| Q4 2024 | 68.9M |
| Q1 2025 | 69.3M |
| Q3 2025 | 70.3M |
| Q4 2025 | 71.1M |
| Q1 2026 | 71.5M |
| Q3 2026 | 92.5M |
Shares outstanding: 90.7M (2026-10-28)
Insider transactions
Form 4 open-market trades (codes S/P), trailing 12 months. Coverage: newest 50 of 83 filings; 50 filings parsed.
Sold by insiders
138.8K shares
$127.6M · 112 transactions
Bought by insiders
0 shares
0 transactions
Net direction
net selling