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LITE Nasdaq· Lumentum Holdings Inc.
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LITE Nasdaq· Lumentum Holdings Inc.
Earnings report Q4 2023

LUMENTUM HOLDINGS INC. Reports Decrease in Net Revenue for Latest Quarter

Segments of revenue

LUMENTUM HOLDINGS INC. reported a net revenue of $366.8 million for the three months ended December 30, 2023. This represents a decrease compared to the net revenue of $506.0 million in the same quarter of the previous year. The decrease in net revenue was primarily driven by higher market competition in the Industrial Tech segment, which reflected share normalization in the market and a reduction in demand associated with inventory build-up and inventory management actions by customers.

Strengths

Despite the decrease in net revenue, LUMENTUM HOLDINGS INC. demonstrated strengths in its financial performance. The company's acquisition of Cloud Light contributed $59.5 million to its consolidated net revenue for the quarter. This highlights the successful integration of the combined businesses and the potential for future growth. Additionally, the company's management commented on the allocation of selling, general, and administrative costs, which further supports their focus on cost management and efficiency.

Challenges

LUMENTUM HOLDINGS INC. faced challenges in its latest quarter. The decrease in net revenue, particularly in the Industrial Tech segment, indicates higher market competition and a reduction in demand. This suggests that the company may need to address its competitive positioning and adapt to changing market dynamics. Furthermore, the company experienced inventory excess and obsolescence charges, primarily driven by U.S. trade restrictions and customer demand changes. This highlights the need for effective inventory management and product transition strategies.

Noteworthy

It is worth noting that LUMENTUM HOLDINGS INC. had net revenue concentration with three customers, individually accounting for 19%, 13%, and 11% of the total net revenue for the quarter. This concentration of revenue from a few customers may pose risks to the company's financial stability and highlights the importance of diversifying its customer base.

Summary

LUMENTUM HOLDINGS INC. reported a decrease in net revenue for the latest quarter, primarily driven by higher market competition and a reduction in demand in the Industrial Tech segment. However, the company demonstrated strengths in its successful integration of Cloud Light and its focus on cost management. Challenges include addressing market competition, managing inventory excess and obsolescence charges, and diversifying the customer base. Overall, LUMENTUM HOLDINGS INC. needs to navigate these challenges to drive future revenue growth and maintain financial stability.

Source documents

Form 10-Q  filed on Feb 08, 2024
70 pages scanned

Reference data

Company financials Q4 revenue 367M
Analyst estimates Q4 EPS beat by 10.34%
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