Core Insights - Lumentum (LITE) reported exceptional financial results for the December quarter, significantly exceeding estimates and showcasing strong growth potential in optical components and systems [1][2]. Financial Performance - Non-GAAP earnings reached $1.67 per share, surpassing the Zacks Consensus Estimate by 18.68% and marking a nearly 300% increase year-over-year [1][9]. - Non-GAAP revenues totaled $665.5 million, exceeding consensus by 1.85%, with a sequential increase of 24.7% and a year-over-year growth of 65.5% [1][9]. Segment Contributions - The Components segment accounted for 66.7% of total revenues, growing 68.3% year-over-year to $443.7 million, while the Systems segment contributed 33.3% with a 60.1% year-over-year increase to $221.8 million [3]. Future Guidance - For Q3 fiscal 2026, LITE anticipates non-GAAP revenues between $780 million and $830 million, significantly higher than the previous consensus of around $700 million [4]. - The company expects non-GAAP operating margins of 30% to 31%, compared to prior expectations of 22%, and diluted earnings per share between $2.15 and $2.35, up from under $1.60 [4]. Growth Projections - The full-year 2026 sales consensus has risen to $2.9 billion, indicating over 76% annual growth, with FY'27 projected at approximately $4.7 billion, reflecting a 61.5% increase [6]. - EPS estimates for FY26 have increased from $5.67 to $7.63, and for FY27 from $8.29 to $14.11, representing growth rates of 270% and 85%, respectively [6]. Market Dynamics - The demand for optical interconnect solutions is being driven by NVIDIA's advancements in GPU architectures, which are increasingly reliant on optical technologies [2][10]. - Lumentum's collaboration with Taiwan Semiconductor (TSMC) is crucial for developing co-packaged optics (CPO), addressing power and heat challenges in AI clusters [13][14].

Company Overview - Coherent is a $29 billion global leader in laser technologies and photonics, serving industrial, communications, electronics, and instrumentation markets [1] - The company has seen explosive growth in demand for its optical solutions due to the AI/datacenter buildout [1] Financial Performance - Revenues are projected to double from $3.3 billion in June 2022 to $6.7 billion by June 2026, with a stock appreciation of 290% during the same period [1] - Profits are expected to increase by 42% this fiscal year, surpassing $5 EPS, with a current year EPS consensus raised by 9.6% following a strong performance in the September quarter [2] Strategic Partnerships - A significant driver of investor enthusiasm has been Coherent's collaboration with NVIDIA to develop silicon photonics networking switches using co-packaged optics [3] - This partnership aims to enhance connectivity in AI factories, allowing for the connection of millions of GPUs [3][4] Product Innovations - Coherent supplies the laser technology for Apple's Face ID, continuing a multiyear strategic supply agreement to produce vertical-cavity surface-emitting lasers (VCSELs) [7][8] - The company is expanding its manufacturing capabilities at its Sherman, Texas facility, which is equipped for next-generation optoelectronic applications [9] Business Divestitures - Coherent is selling its Aerospace & Defense business to private equity firm Advent for $400 million, allowing the company to focus on its core technologies [7][9]