Lumentum Q2 FY26 Earnings Call Summary Company Overview - **Company**: Lumentum - **Fiscal Quarter**: Q2 FY26 - **Revenue**: $666 million, a year-over-year increase of 65% and a quarter-over-quarter increase of 17%, marking a historical high [1][1][1] Key Insights Industry Dynamics - **AI-Driven Growth**: The growth is primarily driven by AI, leading to a significant increase in demand for cloud transceivers and OCS (Optical Circuit Switch) products [1][1][1] - **Backlog Orders**: OCS backlog orders have surpassed $400 million, indicating strong future revenue potential [1][1][1] Financial Performance - **Components Revenue**: - Revenue from optical components reached $444 million - Strong demand for EML (Electro-Absorption Modulated Laser) lasers driven by DCI (Data Center Interconnect) and long-haul applications [2][2][2] - Contribution to data center laser chip revenue is 10% despite only accounting for 5% of sales volume [2][2][2] - **Systems Revenue**: - Revenue from optical systems was $222 million - Cloud transceivers revenue increased by approximately $50 million quarter-over-quarter due to the transition to 1.6T networks [2][2][2] - OCS backlog is expected to be delivered in the second half of 2026 [2][2][2] Profitability Metrics - **Gross Margin**: Non-GAAP gross margin improved to 42.5%, a significant increase of 820 basis points year-over-year and 310 basis points quarter-over-quarter [2][2][2] - **Operating Margin**: Non-GAAP operating margin reached 25.2%, an increase of 1730 basis points year-over-year [3][3][3] - **Earnings Per Share (EPS)**: Non-GAAP EPS was $1.67 [3][3][3] Future Outlook - **Revenue Guidance for FY26 Q3**: Expected revenue between $780 million and $830 million, with a midpoint of $805 million, representing a year-over-year growth rate of 85% [3][3][3] - **EPS Guidance**: Projected EPS between $2.15 and $2.35 [3][3][3] - **Supply-Demand Gap**: There remains a 30% supply-demand gap for EML capacity, with all capacity secured through long-term agreements [3][3][3] - **Growth Drivers**: Three main growth drivers identified: 1. Cloud transceivers (1.6T ramp-up) 2. OCS (release of $400 million+ orders) 3. CPO (multi-million dollar order reserves) [3][3][3] - **Capacity Expansion**: Progress on InP (Indium Phosphide) wafer fabrication expansion is ahead of schedule, with efforts to seek foundry partnerships to meet explosive demand [3][3][3] - **Product Mix Improvement**: The share of 200G products is expected to rise to 25% by year-end, potentially leading to a dual boost in valuation and performance [3][3][3]

Group 1: Company Overview - Shenzhen Yingtang Intelligent Control Co., Ltd. focuses on electronic component distribution, covering a wide range of products including main chips, storage, RF, display drivers, power/analog devices, MEMS sensors, and passive components [2]. - The company has developed self-researched chips, particularly in MEMS micro-mirrors and automotive display chips, with significant R&D investment and talent acquisition [2]. - Yingtang has successfully introduced automotive display chip business to several leading screen manufacturers, with the first automotive-grade TDDI/DDIC entering mass production [2]. Group 2: Strategic Acquisitions - Yingtang is preparing to acquire Guilin Guanglong Integrated Technology and Shanghai Aojian Microelectronics to enhance its capabilities in optical communication chips and analog integrated circuits [2]. - The acquisitions aim to create synergies with existing distribution and self-research businesses, leveraging the growth of generative AI, large model training, and cloud computing [2]. Group 3: Technology and Production Capabilities - Guilin Guanglong Integrated focuses on optical switch technology, with expertise in various control methods including mechanical, MEMS, magneto-optical, electro-optical, and waveguide types [3]. - The company has achieved high-precision automated assembly and testing for optical switch systems, enabling mass production and cost control [3]. Group 4: Market Applications and Demand - Guanglong Integrated's products serve various applications, including collaboration between computing power and networks, intelligent management for telecom operators, and testing for optical modules [4]. - The demand for optical switch technology is expected to grow due to the construction and upgrade of high-speed network infrastructure, such as 5G and data centers [6]. Group 5: Risks and Regulatory Considerations - The acquisition process involves regulatory approvals from the Shenzhen Stock Exchange and the China Securities Regulatory Commission, which may impact the transaction timeline [6]. - There are risks associated with the transaction being suspended, interrupted, or canceled, and the company will fulfill its information disclosure obligations accordingly [6].

OCS是直接实现光信号在光纤端口间切换的交换设备，其原理是直接对光信号进行物理路径的重构，从 而在输入/输出端口之间建立专用光路。无需光电转换的特性带来低时延、低功耗、协议与数据无关的 透明性和兼容性、可靠性等性能增益，但其技术原理也导致光路切换时间长、通道灵活性差的局限性， 较难满足高并发、多对一、随机性强的通信负载。现阶段，OCS的技术路径尚未完全收敛，包括 MEMS(微机电系统)、数字液晶、压电陶瓷直接光束偏转等方案，目前OCS参与者中采用基于3D MEMS 技术的厂商较多。 中金发布研报称，海外光通信公司COHR、LITE在2Q25财报中均提到已获得OCS(光路交换机)初期收 入，且预期相关收入将持续增长。Coherent认为OCS存有20亿美元的潜在增量市场空间。2025年7月， 开放计算项目(OCP)宣布成立OCS子项目，成员包括Lumentum、谷歌、微软等，行业生态向开放化发 展、行业规范的逐步确立有望进一步赋能OCS市场增长。建议关注OCS产业趋势、及该产业链中的在位 厂商和潜在进入厂商。 中金主要观点如下： OCS无需光电转化，相较于电交换机具有低功耗、低延迟、高兼容等优势 谷歌前瞻自研O ...