Lumentum (LITE) investor relations material

Executive summary

• Achieved Q2 FY2026 net revenue of $665.5 million, up 65.5% year-over-year, driven by strong demand in AI, cloud, and optical components and systems, with record shipments in EML lasers and cloud transceivers.

• GAAP net income was $78.2 million ($0.89 per diluted share), reversing a prior year loss; non-GAAP net income reached $143.9 million ($1.67 per share).

• Non-GAAP operating margin expanded by over 1,700 basis points year-over-year, with structural improvements in gross and operating margins.

• Significant backlog and new orders in OCS and CPO, including a multi-hundred-million-dollar CPO order for 2027 delivery; OCS backlog exceeds $400 million.

• Proactive capacity planning, new fab investments, and customer co-investment initiatives underway to meet surging demand.

Financial highlights

• Q2 revenue reached $665.5 million, up 65.5% year-over-year and 17% sequentially, setting a new record.

• Non-GAAP gross margin was 42.5%, up from 32.3% year-over-year; GAAP gross margin improved to 36.1% from 24.8%.

• Non-GAAP operating margin was 25.2%, up from 7.9% year-over-year; GAAP operating margin was 9.7%, up from -12.8%.

• Non-GAAP net income was $143.9 million, non-GAAP EPS $1.67; GAAP net income $78.2 million, GAAP EPS $0.89.

• Cash and short-term investments totaled $1,155.3 million at quarter end, up $33 million sequentially.

Outlook and guidance

• Q3 FY2026 revenue guidance is $780–$830 million, with a midpoint of $805 million, representing over 85% year-over-year growth.

• Q3 non-GAAP operating margin projected at 30–31%; non-GAAP EPS guidance of $2.15–$2.35.

• Two-thirds of sequential revenue growth expected from components, one-third from systems, led by high-speed transceivers and OCS.