Executive Summary
Lumentum reported QQ1 2025 revenue of $336.9 million, up 9.3% QoQ but down 8.2% year over year, reflecting continued cyclical pressures in optical communications despite an improved quarterly top line. Gross profit reached $77.9 million, yielding a gross margin of 23.1%, while operating income remained negative at $82.4 million and net income was an $82.4 million loss, translating to earnings per share of -$1.21. The quarter showcased a narrowing operating loss versus prior periods but did not translate into positive profitability. Cash from operations was $39.6 million, yet capital expenditures were $74.1 million, producing a negative free cash flow of $34.5 million. The balance sheet remains liquidity-strong on a near-term basis (cash and equivalents of $489.2 million; total cash and short-term investments of $916.1 million) but carries a substantial debt burden (long-term debt of $2.60 billion; net debt of $2.13 billion). Management commentary is not included in the provided transcript data; consequently, the analysis relies on the reported metrics and liquidity position to assess risk, resilience, and the potential path to sustainable profitability. The market remains sensitive to data-center/telecom capex cycles and semiconductor supply dynamics, with upside potential from mix optimization and cost discipline if demand stabilizes or recovers.
Key Performance Indicators
QoQ: 141.93% | YoY:35.71%
Key Insights
Revenue: $336.9m (YoY -8.15%, QoQ +9.28%). Gross Profit: $77.9m; Gross Margin 23.12% (YoY +35.71%, QoQ +141.93%). Operating Income: -$82.4m; Operating Margin -24.46% (YoY +0.84%, QoQ +14.43%). Net Income: -$82.4m; Net Margin -24.46% (YoY +16.85%, QoQ +67.37%). EPS (Diluted): -$1.21; EPS YoY +17.69%, QoQ +67.47%. EBITDA: -$3.10m; EBITDA Margin: -0.92% (approximate from reported data). Cash Flow: Operating cash flow $39.6m; Capital expenditures $74.1m; Free cash flow -$34.5m. Balance Sheet: Cash &...
Financial Highlights
Revenue: $336.9m (YoY -8.15%, QoQ +9.28%). Gross Profit: $77.9m; Gross Margin 23.12% (YoY +35.71%, QoQ +141.93%). Operating Income: -$82.4m; Operating Margin -24.46% (YoY +0.84%, QoQ +14.43%). Net Income: -$82.4m; Net Margin -24.46% (YoY +16.85%, QoQ +67.37%). EPS (Diluted): -$1.21; EPS YoY +17.69%, QoQ +67.47%. EBITDA: -$3.10m; EBITDA Margin: -0.92% (approximate from reported data). Cash Flow: Operating cash flow $39.6m; Capital expenditures $74.1m; Free cash flow -$34.5m. Balance Sheet: Cash & equivalents $489.2m; Short-term investments $426.9m; Total cash & investments $916.1m. Total assets $3.9696b; Total liabilities $3.0737b; Total stockholders’ equity $895.9m. Debt: Total debt $2.6217b; Net debt $2.1325b. Liquidity/ratios: Current ratio 5.36; Quick ratio 4.04; Cash ratio 1.60. Efficiency: DSO 53.03 days; Inventory days 140.14; CCC 136.50 days; Asset turnover 0.0849; Free cash flow yield negative. Valuation (trailing): P/B 4.92; P/S 13.08; P/E negative -13.37; Enterprise value multiple negative around -2,109.64 (per provided ratios).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
336.90M |
-8.15% |
9.28% |
| Gross Profit |
77.90M |
35.71% |
141.93% |
| Operating Income |
-82.40M |
0.84% |
14.43% |
| Net Income |
-82.40M |
16.85% |
67.37% |
| EPS |
-1.21 |
17.69% |
67.47% |
Key Financial Ratios
operatingProfitMargin
-24.5%
operatingCashFlowPerShare
$0.58
freeCashFlowPerShare
$0.58
priceEarningsRatio
-13.37
Management Commentary
transcriptHighlights content not provided in the current data set; no earnings call transcript is available to extract themes or management quotes.
Forward Guidance
There is no explicit forward guidance furnished in the provided data. The QQ1 2025 results indicate ongoing profitability challenges despite a modest sequential revenue uptick, and a substantial debt burden that constrains near-term financial flexibility. Given the cyclicality of optical communications and photonics demand, future outlook will hinge on (1) demand stabilization/recovery in data-center and telecom capex, (2) product mix shift toward higher-margin OpComms and laser solutions, and (3) sustained cost discipline to improve operating margins. Key factors to monitor include: trajectory of OpComms/routing optics demand, mix-driven gross margin progression, trajectory of capex-related investments, and the company’s ability to reduce leverage or optimize capital structure. If demand conditions improve and the company accelerates margin expansion through mix and cost controls, multi-quarter profitability could become feasible; otherwise, leverage remains a material risk to earnings quality and cash generation.