Financial Data and Key Metrics Changes - Fourth quarter revenue was $480.7 million, exceeding the high end of revised guidance, with non-GAAP EPS of $0.88 [16] - Fiscal year 2025 net revenue was $1.65 billion, up 21% from fiscal year 2024 [19] - Non-GAAP gross margin for the fourth quarter was 37.8%, up 260 basis points sequentially and 1,000 basis points year over year [17] - Non-GAAP operating margin for the fourth quarter was 15%, up 420 basis points sequentially and over 2,000 basis points year on year [17] Business Line Data and Key Metrics Changes - Cloud and networking segment revenue for Q4 was $424.1 million, increasing 16% sequentially and 67% year over year [20] - Industrial tech segment revenue was $56.6 million, down 6% sequentially but up 6% year over year [21] - Cloud and networking segment profit was 23.6%, up 360 basis points sequentially and 1,350 basis points year over year [21] Market Data and Key Metrics Changes - The company expects to surpass $600 million in quarterly revenue by June 2026 or earlier, driven by strong demand in cloud and AI applications [6][7] - Cloud revenue is growing over 20% annually, with expectations for continued strength in components and cloud modules [6][37] Company Strategy and Development Direction - The company is focusing on three significant growth areas: cloud modules, optical circuit switching (OCS), and co-packaged optics (CPO) [10] - The company is positioned to capture significant value from the AI infrastructure market, with technologies projected to become multibillion-dollar markets within five years [6] - The company is expanding its manufacturing capacity to meet high demand, particularly in the cloud and networking segment [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained growth driven by the rapid adoption of AI, highlighting the effectiveness of their strategy and operational resilience [14] - The company anticipates a breakout year for laser chip sales in 2026, with demand expected to outpace supply [9] - Management noted that the tariff situation is fluid but does not expect material changes to business operations due to tariffs [53][56] Other Important Information - The company invested $59 million in CapEx during Q4, primarily focused on manufacturing capacity to support cloud customers [20] - The company is transitioning from three-inch to four-inch wafers to increase capacity [102] Q&A Session Summary Question: Update on OCS award and revenue trajectory - Management indicated that the OCS revenue is ramping better than expected, with significant revenue anticipated in early 2026 and a more meaningful inflection point in the second half of 2026 [29][30] Question: CPO opportunity and competitive landscape - Management feels confident in maintaining a competitive edge in the CPO market due to unique power levels and reliability of their lasers [32] Question: Contributions to the $600 million revenue target - Management expects continued strength in components, significant contributions from cloud modules, and revenue from OCS to help achieve the target [37] Question: Semiconductor tariffs impact - Management believes their products are exempt from new tariffs and does not expect material impacts on operations [53][56] Question: EML wafer fab capacity and pricing dynamics - Management confirmed they are transitioning to larger wafers to increase capacity and anticipate pricing discussions to become more significant due to limited supply and high demand [102][104] Question: Profitability of OCS product offering - Management stated that OCS will be significantly above corporate margin averages and will be accretive to margins as volume ramps up [110]

Q4 FY25 Performance - Revenue reached $480.7 million[9,10,11,13], a 16% increase QoQ[8] and a 67% increase YoY[8] - Non-GAAP gross margin was 37.8%[10], compared to 35.2% in Q3 FY25[10] and 27.8% in Q4 FY24[10] - Non-GAAP operating income was $72.3 million[10], resulting in a 15.0% operating margin[10] - Non-GAAP diluted EPS was $0.88[10], compared to $0.57 in Q3 FY25[10] and $(0.13) in Q4 FY24[10] Segment Performance - Cloud & Networking revenue was $424.1 million[11] - Industrial Tech revenue was $56.6 million[11] Key Growth Drivers - Strong cloud demand, particularly from hyperscale customers, drove revenue growth[8] - Cloud module shipments exceeded the 50% QoQ growth target[8] - EML business approximately doubled compared to Q4 FY24[8] Q1 FY26 Guidance (Non-GAAP) - Revenue is projected to be between $510 million and $540 million[13] - Operating margin is expected to be between 16.0% and 17.5%[13] - Diluted EPS is projected to be between $0.95 and $1.10[13]

NEWS RELEASE LUMENTUM ANNOUNCES FOURTH QUARTER AND FULL FISCAL YEAR 2025 RESULTS Fiscal Fourth Quarter Highlights: Fiscal Year 2025 Highlights: San Jose, Calif., August 12, 2025 – Lumentum Holdings Inc. ("Lumentum" or the "Company") today reported results for its fourth quarter and full fiscal year ended June 28, 2025. "In our fiscal fourth quarter, we executed exceptionally well in meeting robust demand across our portfolio of cloud products supporting AI data centers," said Michael Hurlston, Lumentum Pres ...

Core Viewpoint - Lumentum Holdings Inc. is expected to report significant growth in earnings and revenue for the fourth quarter, indicating a positive outlook for the company [1]. Financial Performance - Analysts predict Lumentum will report quarterly earnings of 81 cents per share, a substantial increase from 6 cents per share in the same quarter last year [1]. - The projected quarterly revenue is $469.92 million, compared to $308.3 million a year earlier, reflecting a strong year-over-year growth [1]. Company Developments - On August 7, Lumentum announced the expansion of its U.S.-based semiconductor facility, which may enhance its production capabilities and market position [2]. Stock Performance - Lumentum shares experienced a slight decline of 1.1%, closing at $115.03 on Monday [3]. Analyst Ratings - Morgan Stanley maintained an Equal-Weight rating and raised the price target from $85 to $92 [8]. - Susquehanna maintained a Positive rating and increased the price target from $95 to $125 [8]. - JP Morgan maintained an Overweight rating and boosted the price target from $100 to $123 [8]. - Wolfe Research initiated coverage with an Outperform rating [8]. - Rosenblatt maintained a Buy rating with a price target of $105 [8].

Group 1: Company Overview - Lumentum (LITE) currently holds a Momentum Style Score of A, indicating strong potential for momentum investing [3][12] - The company has a Zacks Rank of 2 (Buy), which is supported by a historical track record of outperforming the market [4][12] Group 2: Price Performance - Over the past week, LITE shares increased by 2.07%, while the Zacks Communication - Components industry declined by 2.32% [6] - In the last month, LITE's price change was 19.99%, significantly outperforming the industry's 0.47% [6] - Over the past quarter, Lumentum shares rose by 42.91%, and over the last year, they increased by 156.41%, compared to the S&P 500's gains of 13.04% and 23.38%, respectively [7] Group 3: Trading Volume - LITE's average 20-day trading volume is 2,094,186 shares, which serves as a bullish indicator when combined with rising stock prices [8] Group 4: Earnings Outlook - In the past two months, two earnings estimates for LITE have been revised upwards, while none have been lowered, leading to an increase in the consensus estimate from $1.97 to $1.99 [10] - For the next fiscal year, three estimates have moved upwards with no downward revisions during the same period [10]

Company Overview - Lumentum (LITE) currently holds a Momentum Style Score of B and a Zacks Rank of 1 (Strong Buy) [3][4][12] - The company specializes in optical networking products and is positioned as a solid momentum pick [4][12] Price Performance - LITE shares have increased by 9.93% over the past week, significantly outperforming the Zacks Communication - Components industry, which rose by only 0.28% [6] - Over the past month, LITE's price change is 16.47%, compared to the industry's 4.05% [6] - In the last quarter, Lumentum shares have surged by 72.84%, and over the past year, they have gained 87.37% [7] Trading Volume - The average 20-day trading volume for LITE is 2,129,984 shares, indicating a bullish trend as the stock is rising with above-average volume [8] Earnings Estimates - In the past two months, 6 earnings estimates for LITE have been revised upwards, while none have been lowered, leading to an increase in the consensus estimate from $1.92 to $1.98 [10] - For the next fiscal year, 6 estimates have also moved upwards with no downward revisions [10]

Industry Overview - The artificial intelligence (AI) infrastructure sector is experiencing significant growth, with a bullish demand scenario and a projected capital expenditure increase of 46% year-over-year, reaching $325 billion by 2025 [3][4]. - The total addressable global sovereign AI market is estimated to be $1.5 trillion, indicating vast opportunities for investment and development in various fields such as healthcare, energy, and cybersecurity [4]. Company Highlights Credo Technology Group Holding Ltd. (CRDO) - Credo Technology is focused on high-performance serial connectivity solutions, particularly in AI server markets, with its Active Electrical Cables (AEC) gaining traction due to their reliability [9][10]. - The company has achieved significant milestones, including an 800-gig transceiver DSP design win and the introduction of ultra-low-power optical DSPs, which are expected to enhance industry standards [11][14]. - CRDO anticipates a revenue growth rate of 85.8% and earnings growth of over 100% for the current fiscal year, with a 37% improvement in earnings estimates over the last 60 days [14]. Jabil Inc. (JBL) - Jabil is benefiting from strong momentum in AI-powered data center infrastructure and has a diversified product portfolio that enhances its resilience against macroeconomic disruptions [15][16]. - The company has a projected revenue growth rate of 5.6% and earnings growth of 17.8% for the next fiscal year, with an 8.4% increase in earnings estimates over the past 30 days [17]. Lumentum Holdings Inc. (LITE) - Lumentum designs and manufactures optical technologies that support AI applications, with a focus on high-speed telecommunications and data centers [18][20]. - The company has a strong collaboration with NVIDIA in developing photonic solutions, which are crucial for AI infrastructure [21]. - LITE expects a revenue growth rate of 32.8% and earnings growth of over 100% for the current fiscal year, with a slight improvement in earnings estimates recently [21].

Group 1: Market Overview - Wall Street has shown resilience against trade war fears, with the Nasdaq reaching new all-time highs, indicating investor confidence in the U.S. economy and stock market [1] - The Federal Reserve is projected to cut interest rates again in 2025, which may encourage investment in tech stocks that are currently undervalued [2] Group 2: Lumentum (LITE) Analysis - Lumentum designs and manufactures optical and photonic technologies, providing components for telecommunications and advanced manufacturing, and is positioned to benefit from the growth of AI, cloud computing, and 5G [3][4] - Despite a 10% stock increase over the past five years, Lumentum has underperformed compared to the tech sector's 110% growth [4] - Lumentum's revenue growth plateaued after 2019 due to various headwinds, including the discontinuation of shipments to Huawei and overreliance on Apple [5][6] - The company is now experiencing a turnaround, driven by surging AI demand, with a strong earnings performance exceeding EPS estimates by an average of 42% over the last four quarters [9] - Lumentum is projected to grow its revenue by 20% in FY25 and 33% in FY26, with adjusted EPS expected to double in FY25 and FY26 [10] Group 3: HubSpot (HUBS) Analysis - HubSpot has shown significant growth, with revenue increasing from $182 million in 2015 to $2.6 billion last year, yet it trades 30% below its highs [15] - The company is expected to expand its revenue by approximately 16% in 2025 and 2026, reaching $3.51 billion, while adjusted earnings are projected to grow by 15% and 21% respectively [19] - HubSpot's AI-powered CRM solutions are driving growth, and the company has consistently beaten quarterly earnings estimates for five years [19][17] - The stock is currently trading near its long-term moving averages, indicating potential for a breakout [20]

Core Insights - The technology sector has been the top performer over the past decade, significantly outpacing other sectors, with an average annual return of 20.9% [14] - Major trends driving investment in technology include semiconductors, big data, the Internet of Things, cloud computing, machine learning, and artificial intelligence [1][4] Group 1: Technology Sector Performance - Technology investing is synonymous with growth investing, responsible for five of the top ten performing stocks in the market over the past decade [4] - The technology sector has consistently outperformed the S&P 500, with a 7 percentage point advantage over the index [14] - Nearly 32% of the S&P 500 Index's weight is assigned to the information technology sector, with tech and tech-adjacent stocks exceeding 41% [16][17] Group 2: Characteristics of Tech Stocks - The technology sector includes companies involved in IT services, software development, technology hardware distribution, and semiconductor manufacturing [11] - The classification of tech stocks has become complex due to the emergence of the communication services sector, which includes former tech companies like Meta Platforms and Alphabet [8][9] Group 3: Investment Rationale - Companies across all sectors are increasingly reliant on technology for growth, leading to sustained demand for tech stocks [12][13] - The trend of technology integration into various industries is expected to continue, reinforcing the growth potential of tech investments [12] Group 4: Identifying Top Tech Stocks - A quality screen for selecting tech stocks includes criteria such as a long-term estimated earnings-per-share growth rate of at least 15% and expected revenue growth of at least 15% annually over the next two years [19][20] - Stocks must have at least ten analysts covering them and a consensus Buy rating of 2.5 or lower to be considered for investment [20][21]

Technical Analysis - Lumentum Holdings Inc. (LITE) has reached a key level of support, indicating potential for upward movement [1] - A "golden cross" has occurred, with LITE's 50-day simple moving average crossing above its 200-day simple moving average, suggesting a bullish breakout may be on the horizon [1] - The golden cross pattern typically indicates stronger breakouts due to the involvement of longer time periods [1] Market Performance - LITE has experienced a rally of 31.1% over the past four weeks, indicating positive momentum [3] - The company currently holds a 3 (Hold) rating on the Zacks Rank, suggesting it could be poised for further breakout [3] Earnings Outlook - Positive earnings outlook for the current quarter supports the bullish case for LITE, with no earnings estimates decreasing in the past two months and eight revisions higher [3] - The Zacks Consensus Estimate for LITE has also increased, reinforcing the positive sentiment around the company's performance [3] Investment Consideration - Investors are encouraged to consider adding LITE to their watchlist due to the significant technical indicator and the positive movement in earnings estimates [5]