Lumentum Holdings Inc.

Good day everyone and welcome to the Lumentum Holdings third quarter fiscal year 2026 earnings call. All participants will be in the listen only mode. Please also note today's event is being recorded for replay purposes. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, Press star one again. At this time, I would like to turn the conference call over to Kathy Ta, Vice President of Investor Relations. Ms. Ta, please go ahead.

Thank you, Melissa, and welcome to Lumentum's third quarter fiscal year 2026 earnings call. This is Kathy Ta, Lumentum's Vice President of Investor Relations. Joining me today are Michael Harlston, President and Chief Executive Officer, Wajid Ali, Executive Vice President and Chief Financial Officer, and Wupen Yuan, President, Global Business Units. Today's call will include forward-looking statements, including without limitation, statements regarding our future operating results, strategies, trends, and expectations for our products and technologies that are being made under the safe harbor of the Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties, that could cause actual results to differ materially from our current expectations, particularly the risks set forth in our SEC filings under risk factors and elsewhere. We encourage you to review our most recent filings with the SEC, particularly the risk factors described in our 10Q for the fiscal quarter ended December 27, 2025, and in our most recent 10Q for the fiscal quarter ended March 28, 2026, to be filed by Lamentum with the SEC. The forward-looking statements provided during this call are based on Lamentum's reasonable beliefs and expectations as of today. Lamentum undertakes no obligation to update or revise these statements, except as required by applicable law. Please also note that unless otherwise stated, all financial results and projections discussed in this call are non-GAAP. Non-GAAP financials have inherent limitations and are not to be considered in isolation from or as a substitute for or superior to financials prepared in accordance with GAAP. You can find a reconciliation between non-GAAP and GAAP measures and information about our use of non-GAAP measures and factors that could impact our financial results in our press release and our filings with the SEC. Lumentum's press release with the fiscal third quarter results and accompanying supplemental slides are available on our website at www.lumentum.com under the investors section. We encourage you to review these materials carefully. With that, I'll turn the call over to Michael.

Thank you, Kathy, and good afternoon, everyone. Lumentum delivered an exceptional third quarter with revenue growing 90% year-over-year. record $808 million. Topline growth was primarily driven by our transceiver business and laser chips. Our revenue growth was impressive. Our non-gap operating margin was more so, expanding by over 2,100 basis points year over year, fueled by a rich product mix and strong operating leverage. The margin expansion was primarily driven by our industry-leading scale-out portfolio, But another part of the story was our broad array of scale across products. As hyperscalers exhaust the power and space limits of individual data center buildings, they are shifting to distributed architectures that link commute domains across disparate geographies. These scale across networks require high bandwidth synchronization across multiple data centers. To enable this, we provide critical hardware components that provide high-density optical interconnects while meeting aggressive power and performance targets. Our pump lasers allow ScalaCross architectures to amplify the light signal over four, eight, or 16 fiber pairs simultaneously. Complementing this, our narrow line width laser assemblies provide the precision required for 1.6T speeds, and a higher-order modulation, all within highly compact, pluggable form factors. To manage all this traffic, our wavelength-selectable switches, or WSS, function as the optical traffic cops. WSS keeps traffic in the optical domain, bypassing the latency of electrical buffers, while enabling the high port counts essential for massive fiber routing between data center buildings. Looking forward? Our emerging multi-rail technologies will be vital for the increased parallelism required by the massive fiber accounts and scale across networks. While we have spent the last few calls detailing our revenue growth drivers, it is important to outline the considerable role the Scale Across portfolio will play in our ability to expand gross and operating margins. As we look forward, we expect this part of our business to grow appreciably and, but the supply-demand imbalance likely improved profitability at the same time. Now, let's look closer at the metrics to define our third quarter, starting with the components product category. Components revenue for the quarter was $533 million, reflecting a 20% sequential increase and 77% year-over-year growth. Shipments of our narrow line with the laser assemblies grew for the ninth consecutive quarter, rising over 120% year over year, while pump laser shipments grew 80% year over year. These components remain effectively sold out for the foreseeable future, and we are actively working to secure long-term agreements that will help offset anticipated capital expenditures. Turning to laser chips, we achieved another quarterly company record in EML shipments, led by 100 gig lane speeds, 200 gig EML revenue, more than doubled sequentially. We continued to ship CW lasers to 800 gig transceiver manufacturers and starting in fiscal Q3, we began supplying CW lasers for internal use in our cloud transceiver business. Our wafer capacity, wafer fab capacity in Japan remains at a premium and is fully allocated to meet surging customer demand. We shipped twice the number of laser chips as we did in the same quarter last year, and we are on track to achieve more than 50% growth in EML units by the December quarter of 2026, as compared to the December quarter of 2025. Our ultra high power laser chip manufacturing ramp for CPO applications is also proceeding according to plan. We achieved sequential growth this quarter and are on schedule to both deliver meaningful revenue in our December quarter and fulfill the multi-hundred million dollar purchase order slated for the first half of calendar year 2027. In addition, our development work continues with multiple CPO customers through collaborations that leverage our laser chip technologies within a pluggable turnkey ELS module solution. In mid-March, we announced our acquisition of a fifth indium phosphide fab in Greensboro, North Carolina, which provides the capacity needed for years of future growth. At our grand opening ceremony held just days ago, we highlighted our commitment to U.S. manufacturing and the significant job creation we expect to generate in the state. We onboarded the plant's team and plans to convert the facility from gallium arsenide to indium phosphide are well underway. Another positive note is that we expect to take advantage of a significant number of the tools that already exist in our Greensboro site. Now I'll move to our systems product category. Systems revenue reached 275 million, representing a 24% sequential and 121% year-over-year increase. Cloud transceivers accounted for the lion's share of this growth, increasing over 40% sequentially as we successfully leveraged our expanded manufacturing footprint in Thailand. In addition, we are poised to ramp 1.6T speed transceiver shipments in fiscal Q4 with a portion of this volume leveraging our own CW lasers. We are improving transceiver profitability through better yields and lower scrap rates. Despite these gains, Supply constraints on critical components keep our shipments well below customer demand. In OCS, the multi-year, multi-billion dollar purchase agreement we recently announced ensures sustained long-term growth. Our OCS ramp is largely on track, although our pace and slope are gated by the supply chain. We are experiencing considerable tightness in this product area due largely to the significant step up in requested output. On the other hand, the number of new opportunities we're seeing for optical switches is putting tension on our roadmap, and we're having to make choices across the company in order to service them. Rounding out our systems business, performance industrial lasers and cable access remains muted. Industrial lasers were approximately flat sequentially, while cable access shipments declined on quarter due to customer and timing factors. Looking ahead to Q4, we expect to set another quarterly revenue record. We anticipate that over half of this sequential growth will stem for our components business. The remainder will be driven by the continued ramp of our systems portfolio, primarily through high-speed transceivers and additional contributions from OCS. Our current numbers and guidance reflect continued success in email, lasers, and our scale across components. We are seeing improved performance in our cloud modules business, which has grown significantly across the last few quarters. In addition, while we're seeing initial contributions from both scale out CPO and OCS, they are still relatively modest. Furthermore, our largest single growth driver, scale up CPO, is still very much in its infancy. Taken together, This gives us confidence that we are very much on track to reach our $2 billion quarterly revenue goal, as we articulated at our OFC event. Now, I'll hand the call over to Lajit.