Lumentum: Lumentum Sees Strong Demand in AI and Cloud, Record EML Orders

Lumentum reported a promising fiscal first quarter for 2025, highlighting strong growth in AI and cloud infrastructure demand. Revenue climbed to $336.9 million, surpassing the high end of the company's expectations, driven largely by record-breaking datacom laser chip orders, particularly for 200G EML, fueled by rising demand from AI infrastructure clients. Although the company recorded a GAAP operating loss of 24.5%, its Non-GAAP results show a positive shift, with an operating margin of 3.0% and earnings per share at $0.18. CEO Alan Lowe noted that the increased demand from cloud and networking sectors could signal double-digit growth in the coming quarters.Lumentum also strengthened its cloud and AI diversification strategy by securing a new hyperscale transceiver customer and a volume order expected to ramp up by mid-2025. With Q1 Non-GAAP gross margin at 32.8% and further growth anticipated, the company projects revenue between $380 million to $400 million in Q2, alongside a Non-GAAP operating margin of up to 7.5%. The company's cash holdings grew to $916.1 million, offering solid liquidity for its expansion plans."In the first quarter, we exceeded the high end of our guidance for both revenue and earnings per share," said Alan Lowe, President and CEO. "We set a new record for datacom laser chip orders, including substantial 200G EML orders, reflecting strong demand from multiple customers, including an AI infrastructure customer. Based on expanding cloud demand and improving trends in the broader networking market, we expect double-digit sequential revenue growth in the second quarter."Mr. Lowe added, "We advanced our strategy to expand and diversify our cloud and AI business. We secured an additional hyperscale transceiver customer with a new qualification and initial volume order. This is beyond the new award we highlighted last quarter. We expect to start shipping volume production against these new orders in the first half of calendar 2025, and they will ramp through the year, consistent with the revenue target we set out previously."Key Points:• Record Orders: Datacom laser chip orders hit an all-time high, driven by demand from AI infrastructure.• Financial Metrics: Q1 revenue of $336.9 million, Non-GAAP gross margin of 32.8%, and Non-GAAP EPS of $0.18.• Cloud & AI Expansion: New hyperscale customer for transceivers, with shipments expected to ramp in 2025.• Positive Outlook: Projected Q2 revenue between $380 million to $400 million and Non-GAAP operating margin of up to 7.5%.• Increased Liquidity: Cash reserves at $916.1 million, up $29.1 million from the previous quarter.Lumentum Sees Strong Demand in AI and Cloud, Record EML Orders