Lumentum (LITE) Q1 FY2026 Earnings Call — November 4, 2025

Date: November 4, 2025 | Source: Lumentum IR Q1 FY2026 press release + Seeking Alpha LITE Q1 2026 Earnings Call summary

Participants:Michael Hurlston (President & CEO), Wajid Ali (EVP & CFO), Wupen Yuen (President, Global Business Units), Kathy Ta (VP, IR).

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Kathy Ta, VP IR: Welcome to Lumentum's first quarter fiscal 2026 earnings call. 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. Unless otherwise stated, all financial results and projections discussed in this call are non-GAAP.

Michael Hurlston, President & CEO: Lumentum delivered a record fiscal first quarter. In our fiscal first quarter, we saw year-over-year revenue growth of 58 percent and operating margin expansion of over 1,500 basis points on a non-GAAP basis. Net revenue was $533.8 million, with non-GAAP EPS of $1.10 and significant operating margin expansion.

Our growth continues to be driven by our cloud and AI portfolio, led by laser chips and specialized components for data center interconnect. Our third driver, cloud transceivers, is expected to grow in our second quarter and should now be on a sustainable upward path. With our broad optical portfolio, we are well positioned to support the rapid expansion of AI compute.

Components revenue was $379.2 million, up 18% sequentially and 64% year-over-year, driven by laser chips, laser assemblies and inline subsystems. Systems revenue was $154.6 million, down 4% sequentially but up 47% year-over-year.

We continue to execute on our multiyear growth drivers — cloud transceivers, optical circuit switches and co-packaged optics — as the AI build-out drives unprecedented demand for optical connectivity.

Wajid Ali, EVP & CFO: First quarter revenue of $533.8 million was a record, and non-GAAP EPS of $1.10 was well above expectations. First quarter non-GAAP gross margin was 39.4%, up 160 basis points sequentially and up 660 basis points year-on-year, driven by better manufacturing utilization, pricing and mix. Non-GAAP operating margin was 18.7%, up 370 basis points sequentially and up 1,570 basis points year-on-year.

Non-GAAP net income was $86.4 million, and non-GAAP EPS was $1.10. We held $1,121.8 million in total cash, cash equivalents and short-term investments at the end of the first quarter, up $244.7 million from the end of the fourth quarter of fiscal 2025.

Questions & Answers

Q (Cloud transceivers): You said transceivers should now be on a sustainable upward path. What changed?

A (Michael Hurlston): We have moved past the production volatility seen earlier in calendar 2025 and are now on a sustainable growth trajectory, leveraging our expanded manufacturing capacity in Thailand. Cloud transceivers are expected to grow in our second quarter, and we are well positioned to support the rapid expansion of AI compute.

Q (Capacity/margins): How are you thinking about margin expansion as revenue scales?

A (Wajid Ali): We delivered 1,570 basis points of year-over-year operating margin expansion on record revenue. As cloud and AI revenue scales with better utilization and mix, we see continued operating leverage, with gross margin expanding toward the low-40s as we move through the year.