Lumentum (LITE) 8 Nov 232024 Q1 Earnings call transcript

Good day, everyone, and welcome to the Lumentum Holdings First Quarter Fiscal Year 2024 earnings call. [Operator Instructions] Please also note today's event is being recorded for replay purposes. [Operator Instructions]. I would now like to turn the conference call over to Kathy Ta, Vice President of Investor Relations. Ms. ahead. go please Ta,

welcome is Fiscal President Kathy Relations. and Earnings of Quarter Call. This Ta, to you, First Lumentum's XXXX Investor Thank Lumentum's Vice

me and markets, otherwise and call Senior our Vice Chief and Chief President our SEC expected Chief opportunities factors risk Joining year Corporate July that the based Officer; particularly forward-looking XXXX, considered call President in as XX-K with these superior accompanying Alan described and available for Lumentum's Development and ended filings the unless Wajid Officer. Today's for are to non-GAAP. statements uncertainties Financial reasonable our website supplemental factors Coldren, over are accordance and press Officer; market described XX-Q fiscal soon. Non-GAAP release include the Ali, beliefs encourage risk will filings. We and projections www.lumentum.com the including are financial Chris with to and risks this that Strategy are with discussed current to Alan. today will expectations, our in Executive that, actual guidance With or Lowe, financials that trends revenues, our and well call financial customers on the fiscal beliefs our results Cloud The filed margin regarding as Light are materially except under substitute call including in our could our statements, cause and be most our in I'll GAAP. statements to required are update including turn statements, and financial financial results, end statements not X, undertakes recent operating a quarter regarding first Lumentum statements These subject be also the for financials forward-looking Investors the the during by prepared regarding as our particularly acquisitions, and section. performance, targets. macroeconomic at this provided to note Lumentum's our to technology, on results law. trends, obligation [ slides and you products expectations today. expectations results as NeoPhotonics], expectations review and no applicable to model Please and as recent SEC, and from future differ of and all

Thank you, and everyone. Kathy, morning, good

center Lumentum to the Lumentum. welcome thrilled to providing The products Light Light's photonics is Light in in Cloud leader a We expanded intelligence are believe data rapidly result to a opportunity operators data Cloud within cloud We positions addition acquisition. time team as Cloud Lumentum's growth fivefold accelerating market. to the more our the of served when a of portfolio has at artificial than as centers

recent hyperscale applications unique from calendar in XXXX, Cloud quarter, half requirements computer was most products a range to custom address accelerating optical a In Light's growth from customers, we to needs networking leading and over higher-speed years, been Lumentum's XX% in Light's standard of transceivers. In over and products and of high-speed Also cloud over we of of resumption XXXG strong as XXXX, by differentiated requirements. AI expect revenue market Cloud drive to the calendar revenue customer XXXG shipping revenue. in customer cloud Light supplying of driven derived with Cloud months, networking the transceiver to XX% revenue last well more address broad end In and XX demand. hyperscale as was For derived products. anticipate has both line cloud products

of address like products segment increase manufacturing also broader for and our combination of enhances vertical This given starting exponential opportunities requirements. I global our highlight high broader is in technology portfolio to differentiated are integration. to customers positively better cloud changing reflect results Lumentum supply our and with of would customers, levels that the responding combined compute cloud very reporting a as Our equipped to also transaction. rapidly technology. It well this in footprint networking an updating we security maps to financial are drive market the road models this ahead. AI future fiscal year, and

applications historical Our of financial network center two, and and cloud and focused reporting is traditional growing optical of datacom. of products. We link long-haul new telecom to the the data are for increasingly AI networks the between anticipate Within Cloud and density on operators networking X optical segments: is cloud transmission and the large market models purchasing data lines not of emergence technology and networking, support to the but and tech. cloudification high for the now metro required one, the center. in same switching served our training of markets serve only end telecom data complexity the types growing blurring also industrial

brings Our The sales addition infrastructure operators providers. and much mix more changing well. to direct Light customer is cloud of Cloud as

We are edge lines operators networking directly the and trends, align reporting datacom included and now are these their in applications. better data with interconnect segment. cloud center the also serving for our market product telecom product increasingly the To and and cloud networking networking lines

Turning Industrial segment. to Tech the

high lasers with pulse turning and require the are cuts duration reflect Our and and space. to are industrial sensing and to segment. Industrial speed Industrial precision lasers laser X.X in within product X.X Leading sensing this now features ultrafast the applications Tech short photonics the produce solar better of increasingly lines and application importance manufacturing precise edge distance, of across portfolio broad and approaches. included growing consumer precision commercial beam Industry The of aligns laser-based imaging, accuracy require electronic and component semiconductor, and determining cell to displacement products trends.

will Now fiscal I results. summarize first our quarter

our are and week, factors we above ranges. we our EPS first operations, last Through cost are of in the As and controls guidance reported quarter were the efficient managing midpoint that revenue control.

this our offset being demand market telecom to by to below Due data we correction, in activities. ship center intra-data newly chips we well very the center to continue is for strong the see inventory as our end drawdown and believe as While inventory continue we strength transceivers, industrial demand. this growth acquired

period, we this with our As to our we acquisition. road product attainment on maps NeoPhotonic are respect delivering navigate planned and as synergy transition

Of Cloud in technology opportunities the deliver the cloud Light brings course, are as new about to transceiver we current speed that to leverage products starting leading also quarter the customers. excited we their fastest

as down our most by XX% Partially Now results sequential more softness lasers the our for and given is tunable customers. Robust center let intra-data strongest we and This and inventory of networking offset driver growth on underway cloud QX. product at in down expected, correction and level me in access detail cloud was year-on-year had sequentially center lines. networking demand data revenue is the with networking business. growth across provide broad-based our module. currently networking Cloud our XX% segment

provide As the latency. of transceivers data XXX can also support requirements reducing designed workloads, bandwidth high AI bandwidth, centers gig are that while to

our new at For XXX photonics lane wavelengths XXX chip and X per orders customers, transceiver our EML driving their for level utilize growth gig gig triggering product line. transceivers our different for

to we and Cloud Over supplied an our transceivers to team our with seeing supply that increase expect also are by also are rapidly. deployments enable of EMLs time, CW are new ramp optical of we 'XX, working calendar custom-designed them business, to in Light XXXG more low-latency up and enable high-power lane training even leading interconnects inference our essential provide for gig applications. In for the terabits. hardware capacity to with laser high-bandwidth, arrays per next AI XXX of X.X transceivers to will the architectures generation We

transceiver ramp expect our qualification samples EMLs of are of to well designs qualifications customer with and X.X XXX-gig We terabit production and now underway. calendar 'XX shipping in XXX-gig

XXX Cloud fulfill now be of customers to active leader We AOCs light, connectivity well requirements for to Lumentum as qualifications is cloud reach machine per the a VCSEL-based that in expect centers optics high-speed AI completed. Through lane years gig cables transceivers learning will short for hyperscale are these once their new and optical to come cluster or architectures. workhorse as data

the expect been VCSEL arrays VCSEL shipments and we've optical per these meaningfully ramp second in links, and addition, In XXX high-speed short-reach 'XX. calendar developing for gigabit to we

product high-speed transmission our to on developments. Moving

on both customer performance and form gigabyte applications. XXX products long-haul factors generation positive metro high-speed in enhanced receiving of enable to next are data gigabyte our technologies. discrete We These and will integrated feedback in available rate coherent and XXX be

positive the first are the with at extended center which month, on conference addition, ECOC we areas. product. capability, will connectivity metropolitan within market this last received feedback our customer with coherent we In to believe XXX-gig reach data We interconnect high-speed provide for ZR

socket, XX% down customer the forecast, X% fiber from as smartphone to Tech. for end due sequentially was latest by sensing driven to certain XD laser factors continue due uptick markets. share partially inventory. QX, impacting Tech a pricing in on into competition be our and to Industrial calendar a sensing market Turning bring our fiber primarily end works new and business to lasers and demand discussed soft as inventory in down market softness expected, lasers expected offset as more customer by with product our up intense industrial XXXX macro previously. Based is ramp, XD Fiscal expect leading digestion demand on to to customer Industrial QX we year-over-year

applications market the in dynamics. a solar of given cell X headwinds, However, outlook growth near-term applications. To currently to summarize, ultrafast in new is expect offset growth our for these rapid manufacturing lasers new we tale partially

of see industrial we customer are data for positioning facing long-term On digestion. road In robust inventory our the the that markets, all company ahead. other and the continued hand, headwinds R&D end growth committed we we the we outside networking customers, and of from maps to opportunities our of are are photonics center

focus world to thank as around from to our and it like over and to Cloud I welcome their with Before With the new Lumentum. that, and collaborate turning continue of dedication partner customers employees for our Light Wajid? our Wajid, would they employees all and again

$XXX.X down sequentially Thank year-on-year. was revenue XX% quarter million, you, for Alan. was down which and first Net the XX%

margin and X the of XX% which GAAP $X.XX. than industrial net in loss X was first quarter customers, we networking XX.X%. greater the GAAP share During per operating one gross tech had quarter, was was customer loss XX% market. GAAP in the diluted and for XX.X%, are

was non-GAAP by primarily was lower mix, XX.X%, product which and sequentially year-on-year, quarter and gross factory revenue. driven down First margin down underutilization

sequentially First X.X%, was decreased year-on-year. which non-GAAP quarter and margin operating

million, non-GAAP $XX.X was was adjusted operating million. and quarter EBITDA income First $XX.X

QX basis year million. and and $X.X other was was rates million from $XX.X from was $X.X Non-GAAP million. XX.X% expense and First expense quarter Interest million quarter down non-GAAP non-GAAP million revenue, operating expense interest our SG&A tight $XX.X cash the controls. QX on non-GAAP totaled R&D ago $XX investments. due down higher a due expenses to to income or $XXX.X million on of

and income non-GAAP was quarter $X.XX. was net non-GAAP net share $XX.X million, per diluted First income

for share a diluted quarter was million first XX basis. fully the on non-GAAP count Our shares

Turning the to sheet. balance

key order need few We of indium $XX million million inventory components. million in the to wafer a months. And Our cash campus and as fab well COGS longevity In prebuilding used confidence our to as Japan expenses to items. acquisition. decreased are the to help few related Cloud the happening factory transmission the position purchase during address synergies we for $XX reflects an technology the to our tax next consolidation the capture U.K. payment over from NeoPhotonics annual quarter ever-growing due in we in and the cash nearly approximately our of performance had higher Light acquisition, higher facilitate telecom to $XX purchase This phosphide the of

NeoPhotonics moves manufacturing buffer synergies, momentum's $X.XX we decreased achieve of within ship to capacity cash our products we And inventory, footprint, ramp As operations end therefore, production the expect under manufacturing short-term we manufacturing production. relating to will the these result, back-end rest of of to streamline costs as an million $XX up these we absorption during QX. By to and with align sequentially a billion. and consolidating and NeoPhotonics QX enabling investments QX, expect of be To facilities.

as year. on we we balance inventories cash to of focus the throughout the continue expect to generation, our addition, In internal fiscal decline

Turning details. to segment

financial For into segment release include are historical have categories. the to expanded reformatted benefit of our data we our new tables press that of our earnings investors,

at revenue reporting non-GAAP at segment and $XXX.X XX.X% year-on-year. and First decreased Networking was XX.X% quarter sequentially year-on-year. Cloud cloud decreased sequentially million segment and networking down and XX.X% profit

and down Our quarter sequentially Industrial X.X% year-on-year. Tech revenue first at million segment $XX.X XX.X% was up

Industrial quarter sequentially, was profit reporting non-GAAP of but year-on-year. First XX.X% Tech down up

basis for fiscal today. quarter on move our to a guidance 'XX, assumptions let second me non-GAAP which based as the on Now of is and is of our

with up quarter sequentially Cloud QX sequentially of of with be to second be range We to expect $XXX net for revenue the Tech to 'XX, be and fiscal Networking and million revenue we million. $XXX down anticipate Within the forecast, $X.XX Industrial margin in to this of range partial in diluted and share be Light in we addition X% operating of X% of income range net the per $X.XX. project a quarter to to quarter on revenue. Based to the this, second be Cloud of the to non-GAAP

Our tax non-GAAP EPS million assume based an approximate is rate shares. on a These count XX.X%. the non-GAAP of for annual share quarter guidance second XX.X of also projections effective

In Q&A return inventory with to Alan Cloud terms turn QX, 'XX to that, the do calendar reduced as With calendar of the 'XX levels I'll are beyond in to Kathy? and we start as Networking a in our back rate shipment mentioned, compared expectations in more demand. growth Kathy customer call to expect and sync is end session. market shipments

Thank you, Wajid.

This help participants possible follow-up. would everyone of time. I Before question like we to to Q&A the many as keep to our one allotted to before one get the end us as ask and start should session,

the Now let's begin Q&A session.

first from Simon from the coming Leopold of We line Raymond [Operator our Instructions] James. have question

one. off with a start I'll very easy

a in to inventory some of Just for get -- you I'm of because what you the so the market see second there maybe an my is quarter. like assumption you guidance December trade the want and that's contribution on period now maybe Cloud your to Light I'll in visibility could absorption ECOC bit going now. And question if wondering sounded was during had the improving. -- give the market we've from in know I understanding what easy. unpack for it It that VR show. a that

what your you unpack as in could you're maybe perspective that from laser as own a ZR seeing segment, devices. well both If

which the yesterday. from Thanks, revenue is Light closing, Simon. was to when The going they're Cloud revenue that announced ship we at

of going further out be. So that not about $XXX will months break in the can to And we're any we you over think talked extrapolate revenue. you about million, weeks what X.X trailing X And detail. actually so

going far with in all machine fact, demand, on and data would the think of earlier with As ZR concerned, I pickup the a as expected what's ZR seen AI we've market visibility centers, is have probably inside learning, we otherwise. than in

else of either our for say healthy to for seen ZR Chris, I'd that, tailwind module. add do customers some has that in some that and center new have we've of those? to through so the interconnect, data And demand hyperscale come on of it some anything you

that's None, great. I think

line Samik Your of next question comes from the JPMorgan. Chatterjee from

on Cardoso Yes. Joe is Samik This Chatterjee. for

of give question it's quarter some that quarters. suggested begin while and to suggest us of it relative trends space me. peers granularity from in the in telecom? First bottom you underlying just to expect a in another seeing seeing And to Can recover September in you're your more I subsequent think a the mid-XXXX it's the one phenomenon. itself

that confidence where then driving spectrum your curious I a on are Just you follow-up. and have landing there? what's And

demand some are kind we shipping we're say end that still I'd seen I'd say market we've under that -- market Sure. of frankly. softening, in end demand. And between in

continue think said, some we'll well And demand inventories our even being this that muted do for into calendar I'd But period That time there's so December. reduced probably I see as consumption parts that's on to telecom why as in 'XX. early of inventory products. see going say still we

of larger headcount. Got some capacity been you Alan. I to wafer the datacom to it. et ramping business, there, just non-Cloud about were And rehiring cetera. color, I appreciate had moving talking then you including relative Light believe a the size,

just doing of that what of in the just ramping Cloud terms And datacom these us you accelerate now. I can relative initiatives to then legacy So piece Light an of that capacity whether guess, with of for on update moving books you help some the on the how is Does a business? bunch were pieces. you give tracking?

to is The XXX you is is we want really are Sure. get hyperscalers as an had even allocation datacom chips X again, chips demand, we with solutions the on calls. online And to EML to that the those and gig. And as gig. solution, again, have market most XXX prior of to very discussed EML opposed given robust, capacity unfortunately, we robust. to more go our had go as But if X but projected coming on

more chips. of datacom So chips the more means doubling and a per transceiver

So go XXXX. increased that growth are And seen still track in wafer we've extreme in on we to business. size calendar to

coming in as, going So earlier work fab, on same we additions is all year from at time, capacity online the well our the growing actually than and faster that are while capital they that made because back this employees the are said, be as to to today on although able EMLs come on bringing meet you still had we much back did as expected. the hiring allocation demands, we're we

is and to very XXX grow to continue and the or And balance gig backlog we a through bring lane we I strong Light's per designs be we're on fiscal to expect position into think 'XX, -- are based. year multimode our strong are today as well. there fiscal as of So EMLs VCSEL Cloud the both going especially in leadership that

VCSEL use as And and expecting in-feeds so well as margins we're our and to down costs silicon photonics-based. to drive do up designs product

we And our Light's working prevalent in so laser designs move we do as their more get we're with on today team forward. how CW Cloud

it margin give does time. it us does for So se, EML it improvement per impact opportunities our capacity but over doesn't

from Question Morgan comes Stanley. of from the line Marshall Meta

And Maybe off question, just you of more during year? question. kind then of investment as second you maybe of take first CapEx question, whether have on what building of Color will Light think a out kind Simon's ironed the

ECOC. ZR the getting reception at positive You mentioned kind of XXX

when of Just production? ramp to kind expect you into that would

with of they one continue So pre-acquisition make the very on has Cloud can invest the that imagine, and have. they to things you ramp to that work and we is as been them steep sure Light

been capacity. their they've continuing grow to So

say of we stronger a early future I'd be it's getting and even customers, expected. that positive will very expect CapEx far than requirements, in little have As acceleration as we from been feedback growth that the hyperscalers

have think say determine that global really in, or we're from is diversification view footprint U.S. more probably I but to extreme are as on manufacturing current an that So customers bit would positive it's again as a going Light. early on. I they existing of further path to and as feedback not the customers much really of a accelerate stay to a company don't CapEx existing they we've we this gotten going they headquartered little than to have new accelerate only that footprint were Cloud

So have we'll I some wait and plans on an that our CapEx think Cloud Light on to give future meeting. you for the call update next on or

of ramp to As think far where stage couple get samples, qualification got are ZR at it I beta we're samples to to we positive demonstration and and ECOC. the thousand get at again, today hours as We've production. the still testing takes and XXX-gig feedback to today of a then from

So we're early be and on with 'XX quite will I'd of a well initial positioned what we product. calendar fiscal think think market of say to that But really that's again, ramp. 'XX late I first more type

happy with there. progress very very, So

Our next question comes UBS. of from from the Vogt line David

just Great. try this on I'm Cloud again Light triangulating going maybe to transaction.

And you to So the in calendar math, on prepared conjunction your million think $XXX last the of I a to it know a talked growth with revenue about obviously, assume transaction closing. But then XX perspective, some being in of as regards just Alan, Cloud post margin and should sort 'XX. of the accretive of relatively quick really I months the does in 'XX first has of business sort pre from cloud growth about do that, profile slightly returns call, business kind suggested on in year part it you transaction? business If maybe Light sort sort that the of us to with relative you based I disclosure this of XX% your the to that about existing accelerate margin legacy that rapidly. remarks, the share networking business can the of growing, with

Yes.

question, the first talk and I'll take Light then me Cloud Wajid margins. about have Let

Light that's feedback And I again, into to turn customers. market that has about I I more we growth end legacy one the business, at in guide could and again, Meta's we're said been positive. we're on But a future. to we're So demand don't feedback under as impact right split little talked when going you're quarter to to the reducing. on But Light and the And actually any legacy we the think very And do cloud are early. But except -- not think rate. I earlier has believe we're orders, up that as a impact Cloud -- those closer very think grow question, say much than we time, going we I'd about, inventories Cloud the shipping that faster. not versus

the that anticipate probably matching first more in a customer within So half we of in consumption our shipments 'XX, there's pickup, QX. do that probably

a QX call So is hard Wajid? today's from right now. I see a little bit expect QX in would that we pickup would to levels. But

David. Yes,

margin Light. the opportunity we on with a of So profile, see lot certainly Cloud

of also in the of growth that leverage there's to should we've Cloud grow that got. And we part utilizing natural lot our Light. the expecting footprint business see And manufacturing a we're also of the manufacturing With R&D that while few from provide in-feed then of is existing the with their with our really capacity opportunity R&D help integration. that business, thing, upside the our there's materials. some at rapid some are plans probably next teams those raw an their which important around be quite own the plans on most teams a standpoint going And around working bit integration vertical to weeks, can over vertical

and standpoint the what we've standpoint. Cloud an that communicated said EBITDA business teens the in in the having Light currently from an is operating previously teens So operating low from high that, margin

the communicated high we can margin that that certainly through teens over we the that that an into get business from Our the expectation is opportunities standpoint that we've see XX next operating months.

that's quarters, R&D business. their thinking in of currently is that update As teams, terms more dig be the future around in the but where to we'll in our with thinking teams our able

of comes next America Vivek Arya from line Securities. Our Bank from the question of

First more XX% they question, lot like X they Is gave are the of I type it to than Cloud know but XX%, potential fair When Light, say of CAGR. a I compute look a XX% that's that? year. X you are growth growing a like for at growing faster to that deployments, a

fair So XX%, least at at assume medium near growing a that rate? could more than to Cloud in the is it Light to XX% rather a term, XX% be

I Yes, fair. think that's

the at Cloud gig, introduction growth Given and be that we expect CAGR that should XX% to able XXX Light is rapid grow faster that than number. a

has As XXX that Cloud we XX%, Light's highlighted introduced, quarter recent was revenue than most in XXX gig been more the gig.

So highly to the shift XXX edge continue levered speed. we'll AI leading customers of the be to to gig deployments of that growth the at

for math potential accretion follow-up, wanted accretion the the my I or kind to And double of math. just check

all, EPS then means? define in it the lost could will and of activities what if are level? EBITDA the forth. level, At the accretive, you on level? consolidation So that level? financial year other sometime let's accretive? EPS first income, in put we Or right, So talking and all so income an puts is an being when fab be fiscal and say you on accretive is takes define you is Are when of if accretion it immediately accretion something the And you an talking on operating say, you

on it in perspective when potentially So an is your EPS actually accretive opinion?

on is Cloud money our basis we short-term earnings overnight to And that income per a stand-alone share we way accretive earnings So share. this we're without on Light math operating rates. the believe per to it's the market the to and expect we've Vivek, generate communicated the we from compare immediately synergies do in what earning earlier,

accretion. look that, of earlier. as is only a And just those through actions accretive. spoke we so the And transaction on to go about determine accretion at take immediately the improves synergy that I based And X we some

question of Jefferies. line from Notter from George next comes Our the

gotten guys customers. on any other feedback your I'm other from acquisition curious just the if you Light Cloud have datacom

last in rest just of more this you're datacom of folks for I'm the any increasingly. if I becomes think, you've some with nonissue? or obviously, week those the something competing problematic X, or the that business feedback. wondering had Is

Yes. Thanks, George.

with to acted I've over assure And very, you demand to very and -- I still very go is many there's them like customers that our discussions us. transceiver them As imagine, they're solid strong they time. think important around, had partners to can our important very plenty we've and with of partnership

buy I'd that that from that alternative competitor they So they another they've the someone for or from is say trusted years. buy

And so with to negative that customers transceiver implication demand I and VCSELs matter. don't their see for any and DMLs us EMLs, our for on respect

think positive, been not any X far, shifts feedback has announcement and so have The I So a seen good. week so a from we or demand the of as result ago.

from Our from next Christopher comes of question Rolland the Susquehanna. line

here describe over of spoke to XX One XX of next see see in competitors your months. ramp strong quarter wondering of in would growth, sequential you your XXXG wondering result of a they to each strong starting ramp something could as on your of And of of going if were next this kind the I year. a similar kind was the was shape horizon. XXXG growth March. I if you

days. that have shipping are continues the gig Chris, the the a as ramp Cloud will we just from early market very of that revenue see X-plus continue to say lot that we both is acquisition, commentary very continues from next a would standpoint would we over call, on to XXX yes, in quarters similar expect I increasingly is, strong and and EMLs That its emerging then the we've into very is And Light highlighted their XXX the focused future. up that on gig chip ramp. as and demand

to continue of cloud will business So yes, future. our foreseeable XXX-gig we believe the portion into grow the

mix system about to talk vendors, I XX year. terabit my know And sequential to holistic designs think on but so networking of but next in of I system next versus cloud each to do break possible as by second I this take switches if also hyperscalers for is laser AI, Okay. question, don't year of wanted But year, kind vendors, well? you out for it's how kind had engagements quarter for both custom out if calendar out demand, there. don't know you growth

couple a pieces. of So

Cloud with performance consumption now the latency that to by are envelope as really continues landing, bit at So and will, to other last as growth solutions unique custom power well the to products that or benefits on AI as bringing we're of and workloads. operators are XXX% providers, as as our AI both, in critical are together least, the one will, stress that's next And And combination regards from yes, transceiver with non-AI. when cloud-like requirements custom of year, push to growth this road primary capabilities you hyperscalers. On of customers, belief for you AI-driven is manufacturing We solutions you to going the you sooner next-generation tool the of back that than that. if custom our where system designs we laser from implement they're to visibility maps will, directly, But then with partner if the most we unique chest, or, that bringing laser of later. that is well the said, the driven we if challenges so as sort our don't chip full address cloud AI looking manufacturing Light, the together market have applications. you will, with engaged have to versus if

line Our next the Loop of Ananda from question Capital. from Baruah comes

I'll transceivers just stick Yes, to I'll as well. just --

follow-up. any be this getting I the volumes for what Cloud closed latency or to points now Light see, rate? a Then and of Chris that sticking you have run call you've Allen, guys You Cloud getting deal, or kind would point quick Light, probably

Could you Ananda? mean clarify what you

Yes.

shipping in that is as newly of just Or for orders the as them new they're absorbed in that guess balance up I out? the speak, mean opportunities organization, to I kind into sheet and street taking given everything place, that is given your it so open sort credit, -- may and So simple your them. given of

place taking they term to is to the now latency So is rate that right that work are they out in smoothly wondering, in? that come manufacturing up it be the near as them in the term, get just or elegantly orders place, needs there is something and there accomplish Given orders the revenue? to things the orders into mechanism could put capability just send out? could, to door getting some in be the -- to required set run and cause near have those Or

the is orders, mean Yes. you that's Cloud I what mean. lacking if not team Light

additional as and capacity factory and that I prior So the And today. kind plans to we acceleration they said, I factory said and acquisition. I I accelerated visibility see demand think, as well as the think take would further do to acquisition then footprint could with -- volumes earlier, CapEx we footprint. into That could continued to that that of we the had think able will additional expand to that plans ramp be capacity be to in have that have

we're frankly, the that of not have close hours all hope up, screw out, that we frankly. now. Given into there XX all and a and We're team we sorting it to

them distract let I help that from to stay with customers. them think trying they're to So a they've trying the really as going doing combination very very, We're we're not them. ramp. stuff a to And do those and very here winner we're cloud discussions said, their But steep up my been well. is

helpful. of And X X helpful. Do a -- follow-up in area be, sense super interest. looking regard, could make guess area? do quarters, in space you of that have so, from of it super does could XX that given Or -- That's keep everything XX you you think -- It's to stay you or this sort an tech you perspective? you X that's active in you're to sort in obviously need? pluggable just the in last the the of would months sort acquisitions I made Yes, the

mean looking. we're always I Yes.

finish I of our now, we acquisition the making is focus NeoPhotonics, factory The back-end that. and those synergies year, we'll think happening talked benefit of and sure the the end get is synergies at and of fiscal about consolidation this that's meaningful. Wajid

the the that acquisition cloud AI that goes have ] make light finish hyperscalers demand to we the in meet ramp we stuff. up ML So on sure to the and [ of effectively what's going to and have

competition. in think our we're have and might able I today tuck we interested next quarters. competitive to our over to give be another always add? that for in the you else to So have always said, But what Chris, we advantage us full hands looking do several anything

post-acquisition more to hitting I value And translated had work capabilities. think years, to together fully to both together have that's to point unlock then technology, was that performing all reiterate those all as capabilities got we of and the those say I are that component a manufacturing going look. acquisitions. as getting the build time come pieces these Ananda are to that acquisitions of the number is Alan transceiver highlighted, all that key now, the effect over we've between the to and organic a But out pluggable multiplier put strategy continuing into just we really of and benefits last we realize and deliberate has now on n the

lot out We for are you realize done, But building got the do to and we've potential the we've our if of product what of time portfolios. not technology taken a being, already will, on. maximum work to

Your next Genovese Mike Rosenblatt line question comes of Securities. from from the

Great.

that talk can about MEMS-based sort are? that I'm Switch and opportunity more And AI? guys how the is away -- you you far revenues talk technology product? more a -- How First, optical curious. of about can for

centers applied. beginning network lot there's core and reconfigure electronically within a around cloud being reconfigure Mike, to or begin to terms our of lot to that but hear involve certainly as about in say, year, be little a key can time talk it time to a prototypes next ship. would the realize bandwidth lot today's premature network of going over an being so a in operators rather, to MEMS. that in brings are of obviously, about value centers, optically frame, for more seen we've to networks is hyperscale years exact data as case, will capability. There's the a data and going in operators optically able market, you're a to of bandwidth able telecom In technology I range think it's I

guess more AMPs, near-term opportunities and are spoke they maybe Great. something some similar where seeing anything China, sequential And expected about your competitor you transport immediate because WSS, ROADMs than in that? some growth of yesterday I to opportunity

mobile we've WSSs get to mean happening, is China really around it's and them. the the of go expedite that and tender it's nice seen to I kind a components Yes. customer

and opportunity meaningfully So 'XX to we've the happening been think, calendar an that, and the midst we're will a I meet of situation think trying one it's specific for parts are and or I and but volumes year. meaningful happen in drive the of is that think more large happening next early where unique that that tender, demand I for bidding deployments more opportunity, deployments the that's, and of will it's

yes, that is an opportunity. So

are to We phone they need it. on there they with I've need been get them the help that. executives when to seeing what And the

from from Question comes the of line Stifel. Ruben Roy

did Any end softness. To there, you sounded think, wondering comment. comment follow a detail that Alan, the areas that up over there, additional customer please. XX of you're last days, I market-based or I to just geography-based was some started it like you mention see -- if was telco or

network the think I just America of carriers. around at equipment you've echoing some think heard inventory softness regional I North and our manufacturers an it's what from

anything same It's it's the So us cautious current outlook that and more is making the kind into of for and seen enlightening. calendar I early we've about of don't that think 'XX. new quarter be

I probably Okay. update more there. data you're you think -- project? planning an even can longer give thinking data DSP spot And for that With focused whether center or optics wondering about Got on on it. and then coherent update was optics. if an you there's with team on as follow-up, us for Chris. center not term, what And the how you're a

Yes.

is piece, will, in continue another strategy. module pluggable one progress you of developing make our great we if our puzzle certainly, in to So which coherent DSP,

you that start our technology run, evaluating inside fact, in data we'll over expect calendar 'XX. -- will the data we as expect of we center well, it's interconnect longer early further capability yes, to And center XXX-gig the a calendar And think penetrate think parts we referenced. critical the I latest 'XX, for So in that I both opportunity.

if if add I I add Ruben, to maybe could to And that, well. as that could

team DSP team that out only our been margin enabling building the critically not AC other RFIC to stacking but to have company. address independent in-house We have components of

been us. -- teams that in-house to So things the having a benefits have of big building and for drivers and that TIAs started is that like we've out, see those benefit

from our next coming of have Dave And question the from we line Kang B. Riley.

comments on your question telecom. First regarding is

maybe we slight in talking we still quarter? much we are decline -- high even should single a to like double or digits? Are a digit decline how December So expect the

there'd think don't be that a indicated I Yes, had decline. we

I that indicating end below is customer shipping consumption. what we're think we're still

with building what muted with it's to so parity us respect back our regard And and customers to being and are shipping to shipping deploying.

a then comments going because the direction the very wrong more that's low so And we're at level. it's already

about 'XX regarding Got your comments that calendar year-over-year. right? CNN organic, I it. And was then being assume in up,

the I question. missed beginning I'm the sorry, of

networking. and Cloud

-- I it's up be believe to you it's calendar said right? think I going organic, 'XX,

inorganic. both and would I say organic

up. Yes. be We expect to that

Okay.

be calendar next just year, be Light, year. So I will clear, mean, even without next Cloud CNN

Yes.

Okay.

clarify that. Just wanted to

to Alan I'd Mr. final no time. the now to this closing turn are over at for There Lowe call like questions back further comments.

we you. I'd up thank as call. like thoughts leave wrap few to a and you Great, with this

data see together a our speed Light to and center the extend very operators even highest welcome I working Lumentum. talented joining look would infrastructure optical to our customers. Light is already Cloud team to leading-edge Cloud transceivers R&D like delivering excels to very much team providers. product deliver more forward cloud First, I teams the The warm else possible at innovations to what to to

serve center learning, growth fundamentals the the the for cloud mobile, data business artificial mid- in intelligence, and machine to as computing by carrier are markets. our exponential long solid term bandwidth required addition, we In

our are markets. New lasers traditional our industrial and for sensing products high-growth applications and expanding commercial are driving advanced beyond demand imaging our applications into

in for to you We the would like weeks. we are investing at I coming look to and in upcoming future. With with meet to everyone that, thank forward attending, meetings talking innovation customer to and committed in and again investor conferences the needs Thank today you.

Have your and your today. a thank participating that disconnect concludes this conference call lines. lovely ask you please for day. you gentlemen, and for We Ladies