Slides
Page 1
Innovating for the Era of AI-Optimized Networking Lumentum Investor Briefing at OFC 2025 April 1, 2025
Page 2
© 2025 Lumentum Operations LLC 2 Cautionary Note Regarding Forward-Looking Statements and Non-GAAP Measures This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These include statements regarding our belief and expectations with respect to our markets, customers and industry, including market growth and addressable market, any anticipation or guidance as to demand for our products and technology from our customers and their end customers, including drivers of that demand, statements regarding our acquisitions, achievement of synergies the expected impact of acquisitions on our business and financial results, statements regarding our product roadmaps, investments, new technologies and availability of new products and technologies and our financial models and outlook with respect to revenue growth, future net revenue, gross margin, operating expenses and operating margin, and related assumptions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. Among the factors that could cause actual results to differ from those contemplated are: (a) uncertainty and volatility in the global markets, including uncertainty and volatility in the macroeconomic environment, inflationary pressures, uncertainty in the political or economic environment, such as geopolitical conflicts, war, changes in the regulatory environment, including trade and export restrictions and the imposition of tariffs, duties, and other restrictions on business, and the effect of market disruptions on demand for our products, technology spending by our customers and our ability to obtain components for our products; (b) quarter-over-quarter product mix fluctuations, which can materially impact profitability measures due to the broad range of gross margins across our portfolio; (c) decline of average selling prices across our businesses or increase in costs, either of which will also decrease our margins; (d) effects of seasonality; (e) the ability of our suppliers and contract manufacturers to meet production, quality, and delivery requirements for our forecasted demand and the effect of ongoing supply chain constraints, particularly in semiconductors; (f) changes in customer demand, including those due to changes in inventory practices and end-customer demand; (g) our ability to attract and retain new customers; (h) the risk that Lumentum’s financing or operating strategies will not be successful; (i) failure to successfully integrate acquired companies and businesses or obtain the expected returns on our investment and (j) our failure to accurately identify liabilities and risks in the businesses we have acquired or will acquire. For more information on these and other risks, please refer to the “Risk Factors” section included in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2024, filed with the Securities and Exchange. In addition, the results contained in this presentation are valid only as of today’s date except where otherwise noted. The forward-looking statements contained in this presentation are made as of the date hereof and the Company assumes no obligation to update such statements, except as required by applicable law. Unless otherwise stated, all financial results and projections are on a non-GAAP basis. Our GAAP results, details about our non-GAAP financial measures, and a reconciliation between historical GAAP and non-GAAP results can be found in our earnings releases on our web site, www.lumentum.com, under the investors section. Our non-GAAP measures used in this presentation exclude (i) stock-based compensation, (ii) acquisition related costs, (iii) amortization of acquired intangibles, (iv) amortization of acquired inventory fair value, (v) restructuring and related charges, (vi) foreign exchange (gains) losses, net, (vii) non-cash interest expense on convertible notes, (viii) intangible assets write-off, (ix) integration related costs, (x) non-GAAP income tax reconciling adjustments, and (xi) other charges or income related to non-recurring activities. We have not provided reconciliations from GAAP to non-GAAP measures or the equivalent GAAP measure for non-GAAP measures in our outlook or forecasts, as they cannot be provided without unreasonable effort. A large portion of non-GAAP adjustments, such as restructuring charges, stock-based compensation, non-GAAP income tax reconciling adjustments, acquisition related costs, and other costs and contingencies unrelated to current and future operations are by their nature highly volatile and we have low visibility as to the range that may be incurred in the future. This presentation contains industry market data, industry forecasts and other statistical information. Such information has been obtained from publicly available information, industry publications and other third-party sources, and the Company makes no representations as to the accuracy of such information. The Company has not independently verified any such information. Certain information in this presentation is based upon management forecasts and reflects prevailing conditions and management’s views as of this date, all of which are subject to change.
Page 3
© 2025 Lumentum Operations LLC 3 Today’s speakers WAJID ALI EVP and CFO CHRIS COLDREN SVP, Chief Strategy and Corp. Dev. Officer WUPEN YUEN President Cloud and Networking MICHAEL HURLSTON President and CEO KATHY TA VP, Investor Relations
Page 4
© 2025 Lumentum Operations LLC 4 Innovating for the Era of AI-Optimized Networking MICHAEL HURLSTON PRESIDENT AND CEO
Page 5
© 2025 Lumentum Operations LLC 5 © 2025 Lumentum Operations LLC 5 The Virtuous Cycle Driving AI Power Scaling Improved power efficiency Lower power per bit of data Increased ability to scale AI Higher photonics intensity
Page 6
© 2025 Lumentum Operations LLC 6 © 2025 Lumentum Operations LLC 6 Photonic Solutions: The Key to Unlocking AI Growth
Page 7
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 7 © 2025 Lumentum Operations LLC 7 Broad Expertise in Foundational Technologies Critical to AI Experts in materials and device physics Indium Phosphide (InP) Gallium Arsenide (GaAs) Indium Phosphide Photonic ICs Silica on Silicon LCoS Design Process Know-How Wafer Production Silicon Photonic ICs MEMS
Page 8
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 8 © 2025 Lumentum Operations LLC 8 Photonics Evolution Sparks a Rapidly Growing AI Market Sources: LightCounting: Market Forecast, Oct 2024, LightCounting: Optics for AI Jan 2025, Cignal AI: The Optical Circuit Switching Market 1Q25 Note: AI high-speed datacom transceivers = 400G and faster Market opportunity growing over 25% CAGR while delivering power efficiencies 2024 2029 >25% CAGR $30B+ $10B Served Market Focus for AI: ▪ High-speed datacom transceivers, InP lasers, and optical components ▪ Custom CPO and LPO solutions ▪ Optical Circuit Switching (OCS) ▪ ZR/ZR+ DCI modules & high-baud-rate components ▪ Optical line system components Scale-up photonics to provide further upside
Page 9
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 9 © 2025 Lumentum Operations LLC 9 End-to-End Cloud and Networking Leadership SUB-SEA HIGH-RELIABILITY PUMP LASER & AMPLIFIER COMPONENTS COHERENT LASER & COMPONENTS DATA CENTER DML & EML TRANSMITTERS VCSEL TRANSMITTERS CW LASERS ZR MODULES OPTICAL SWITCHING ACCESS & 5G TUNABLE ACCESS MODULES TRANSMIT & RECEIVE COMPONENTS LONG-HAUL & METRO COHERENT COMPONENTS & MODULES ZR+ MODULES ROADMs & AMPLIFIERS PUMP LASER & PASSIVE COMPONENTS CLOUD-DRIVEN MARKETS
Page 10
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 10 © 2025 Lumentum Operations LLC 10 Key Takeaways 1 Lower power per bit architectures drive increased data center photonics intensity 2 Served cloud market expanding >25% CAGR in a rapidly evolving ecosystem 3 AI photonics leadership to drive >$3B annual revenue at >20% operating margin* *Note: This is a target model and is not intended to represent guidance on actual outcomes. Actual results and timing is subj ect to the various assumptions and other risks and uncertainties.
Page 11
© 2025 Lumentum Operations LLC 11 Operating at Cloud Velocity WUPEN YUEN President, Cloud and Networking
Page 12
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 12 © 2025 Lumentum Operations LLC 12 Innovating with Photonics to Keep Data Center Power in Check Source: McKinsey, November 2024 0 40 80 120 160 2024 2025 2026 2027 2028 2029 ESTIMATED GLOBAL DATA CENTER POWER USE Aggregate Power [GW] ~20% CAGR - 200 400 600 800 1,000 1,200 2024 2025 2026 2027 2028 2029 Millions of Lanes InP GaAs100G 200G 100G 200G+ Lane Speeds Calendar Year >45% CAGR ESTIMATED OPTICAL LANE GROWTH IN DATA CENTERS Calendar Year Source: LightCounting: Optics for AI, Jan 2025 200G+ lane speed generation, co-packaged optics, and OCS to mitigate data center power growth AI Non-AI
Page 13
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 13 © 2025 Lumentum Operations LLC 13 Accelerating to Faster Optical Lane Speeds: Why InP is the Future Higher data rate lane speeds improve power- per-bit efficiency and demand more single- mode fiber InP solutions LANES IN 2024 InP 81% VCSEL 19% LANES IN 2029F InP 61% VCSEL 39% Source: LightCounting: Optics for AI, Jan 2025
Page 14
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 14 © 2025 Lumentum Operations LLC 14 Lumentum’s Decades of InP Leadership Paving the way for Cloud data center success 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 Launch Year Data Rate (Gb/sec) 25G NRZ 43G NRZ 106G PAM4 56G PAM4 106G PAM4 Differential Drive 224G PAM4 200G PAM4 384G PAM8 225G PAM4 10km 400G PAM4 226G PAM4 Differential Drive
Page 15
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 15 © 2025 Lumentum Operations LLC 15 400G PAM4 InP Transmitter Demonstrations: Lumentum Booth #2119 Paving the way for next-generation 3.2T optical interfaces Partner announcement: “Keysight, NTT Innovative Devices, and Lumentum Achieve New Benchmark 448 Gbps Data Transmission for AI” 448G InP EML 450G InP DFB-MZI InP Chip Innovations Enabling Range of High-Speed Interconnect Needs Live demonstration in Lumentum’ s booth #2119
Page 16
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 16 © 2025 Lumentum Operations LLC 16 200G Lane Speed Differential Drive EML Power Savings at 200G+ Lane Speed 200G Lane Speed in 1.6T Fully Retimed Transceiver EML CW-SiPho 10-15% power reduction Normalized Switch Power-per-Bit Differential-drive EML reduces power consumption and improves signal integrity Laser Comparison at 200G Lane Speeds
Page 17
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 17 © 2025 Lumentum Operations LLC 17 100G Lanes in Fully Retimed Transceivers 200G Lanes in Fully Retimed Transceivers 200G Lanes in LPO Transceivers CPO Pluggable UHP-ELS Lasers EML CW Power Scaling with an Advanced InP Laser Roadmap Network Power-per-Bit ~40% power reduction ~15% power reduction Multiple pathways to reduce power consumption Pluggable, Ultra-High-Power External Light Source CPO Solution Laser Options Within Pluggable Transceivers UHP InP LASER ELS PLUGGABLE FORM FACTOR ~45% power reduction
Page 18
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 18 © 2025 Lumentum Operations LLC 18 Lumentum Enabling CPO in NVIDIA’s Spectrum-X Switch © 2025 Lumentum Operations LLC 18 Enabled by Lumentum’s high-reliability, ultra-high- power laser Lumentum positioned to win in CPO with laser differentiation
Page 19
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 19 © 2025 Lumentum Operations LLC 19 What Does it Take to Develop a Winning CPO Laser Source? Image Source: https://spie.org/ © 2025 Lumentum Operations LLC 19 (Answer: leadership in the most demanding ultra - long - haul and sub - sea network applications
Page 20
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 20 © 2025 Lumentum Operations LLC 20 Leading Scale-Out Speed Scale-Out Transceiver Specs (DR, FR, PSM) Key Scale-Out Optical Components Scale-Up Bandwidth (10X scale-out speed) GPU Scale-Up Solutions Lumentum’s Power-Efficient Photonics Roadmap for AI Scaling 2024-2025 2026 2027 2028 2029 1.6T800G 3.2T ELS PLUGGABLE UHP InP LASER 14.4T 28.8T7.2T Copper Backplane Optical Scale- Up Solution?Copper Cables © 2025 Lumentum Operations LLC 20 CPO Gen 1 CPO Gen 2 ▪ 100G EML ▪ 70mW CW Laser ▪ 100G PIC ▪ 200G EML & Diff. EML ▪ 200G Photodetector ▪ 200G CW Laser ▪ 200G PIC ▪ 400G EML & Diff. EML ▪ 400G Photodetector ▪ 400G CW Laser ▪ 400G PIC CPO Gen 1 CPO Gen 2
Page 21
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 21 © 2025 Lumentum Operations LLC 21 ▪ 25+ years of expertise in optical switching ▪ 200+ patents: reliability, design & applications ▪ 130,000+ MEMS-based WSS* units shipped ▪ Over 1 trillion MEMS-hours of proven field reliability ▪ Large-scale, highly automated manufacturing ▪ #1 market leader in WSS Note: WSS = Wavelength Selective Switch What It Takes to Develop Optical Switching (OCS) Products for AI
Page 22
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 22 © 2025 Lumentum Operations LLC 22 2010 Mini WSS (50 & 100GHz) <10 PORTS IN COMPACT FORM FACTOR 25 Years of Leadership in MEMS Optical Switching Reliability 2000 MEMS team formed 2002 1D piano MEMS array 2004 2D piano MEMS array ALLOWS HITLESS SWITCHING 2008 Low drift MEMS LONG TERM STABILITY 2010 Comb drive ENHANCE MEMS STABIILITY AND RANGE OF MOTION 2012 Hidden hinge MEMS PROTECTION FROM CONTAMINATION 2019 Reduced drive voltage + high reliability DAC ENHANCED ELECTRONICS RELIABILITY 2024 Large 2D array for OCS 2D ARRAY WITH 2D MEMS MOTION 2005 1st multi-port WSS (50GHz & 100GHz) <10 PORTS 2011 1xN high durability switch 13 PORTS WITH 1 BILLION RELIABILITY CYCLES 2012 TrueFlex® OCM FAST SCANNING, 1 BILLION+ RELIABILITY CYCLES 2019 TrueFlex® 8x24 C-WSS 66 PORTS, MEMS + LCOS 2024 TrueFlex® 16x24 C-WSS 84 PORTS, MEMS + LCOS 2022 Protected comb drive FURTHER PROTECTION FROM CONTAMINATION Unmatched reliability: 0.1 ppb issues with 1 trillion MEMS-hours in the field 2025 R300 OCS 2X 300+ 2D-MIRROR ARRAYS, 600+ PORTS
Page 23
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 23 © 2025 Lumentum Operations LLC 23 Breakthrough Power Savings Through Optical Switching >65% power reduction in 100K-scale GPU deployments with optical switching* >$1.5B market opportunity by 2029** FRONT-END NETWORK SCALE-UP NETWORK (COPPER BUS) SCALE-OUT NETWORK (BACK-END) OCS OCS OCS OCS Sources: *Lumentum: Energy-Efficient AI Networks Lead to Dramatic Reduction in Environmental Impact, 2024 **Cignal AI: The Optical Circuit Switching Market Report, 1Q25
Page 24
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 24 © 2025 Lumentum Operations LLC 24 Source: LightCounting Market Forecast, Oct 2024; includes on-board optics, ZR/ZR+, and other DWDM modules for Cloud customers 2024 2029 $2.5B $7.5B 800G 400G >25% CAGR CLOUD DWDM COMPONENT & TRANSCEIVER MARKET FORECAST 1.6T Securing Grid Power Now Requires Spreading Out Data Centers Plays to Lumentum’s strengths in coherent optical component leadership LUMENTUM’S LEADING OPTICAL COMPONENTS Integrated Coherent TROSA, 200 Gbaud Symbol Rate InP Modulator with Driver SiPho PICNarrow Linewidth Tunable laser 400G and 800G Coherent Pluggable Transceivers Ultra-Narrow Linewidth nITLA
Page 25
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 25 © 2025 Lumentum Operations LLC 25 Q4 FY24 Q4 FY25 Q2 FY26 Cloud Laser Chips at High Manufacturing Scale © 2024 Lumentum Operations LLC 25 CHIP UNIT CAPACITY 2X in 18-mo period More InP capacity expansions in process
Page 26
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 26 © 2025 Lumentum Operations LLC 26 World-Class Manufacturing at Lumentum’s Thailand Campus ▪ Expanding state-of-the-art cleanroom campus to support AI growth ▪ Scaling production for 800G and 1.6T optical transceivers ▪ Proprietary process with custom equipment, wafer-level testing, and bare-die packaging
Page 27
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 27 © 2025 Lumentum Operations LLC 27 Note: AOC = Active Optical Cable A Full Suite of Optical Capabilities to Serve Cloud and AI/ML Needs Switching/Provisioning of Increasingly Dense Traffic Long-Reach Data Center Interconnect 200–800G transceivers and AOCs with 1.6T in qualification Full suite of photonic chips for vertical integration and cost ZR/ZR+ transceivers High-baud-rate coherent components Optical line system components Connectivity for High- Speed Ethernet and InfiniBand Applications INSIDE THE DATA CENTER OUTSIDE THE DATA CENTER New opportunities for optical switching Intra-Data Center Switching Full solution suite in optical switching, amplification, mux/demux, and monitoring
Page 28
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 28 © 2025 Lumentum Operations LLC 28 DATA CENTER INTERCONNECT (DCI) FRONT-END NETWORK SCALE-UP NETWORK (COPPER BUS) SCALE-OUT NETWORK (BACK-END) AI/ML BACK-END NETWORKING RACK CLOUD FRONT-END NETWORKING RACK DCI & LONG-HAUL NETWORKING RACK General- Purpose Servers OCS ▪ TrueFlex® Micro Twin 2x34 integrated C + L WSS ▪ 800G ZR/ZR+ pluggable modules ▪ Transmission over > 400km fiber ▪ 800G and 1.6T optical transceivers ▪ 300x300 Optical Circuit Switch (OCS) OCS ▪ 400G, 800G SR transceivers ▪ 800ZR transceivers Cutting-Edge Photonic Innovations at OFC 2025: Lumentum Booth #2119 Superior Photonic Connectivity from AI Racks to Cloud Interconnects to Long-Haul Networks
Page 29
© 2025 Lumentum Operations LLC 29 Investing for Rapid Growth WAJID ALI EVP and CFO
Page 30
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 30 © 2025 Lumentum Operations LLC 30 Operating Strategy to Optimize Profitability Profitability expansion with increased operational scale ▪ Grow top line revenue ▪ Optimize manufacturing footprint ▪ Reduce fixed costs Expand Operating Margin ▪ Investments in R&D for product differentiation ▪ CapEx to support cloud growth ▪ Expand wafer fab scale and efficiency Invest for Growth
Page 31
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 31 © 2025 Lumentum Operations LLC 31 © 2025 Lumentum Operations LLC 31 Customer and Product Mix Shift to Cloud Datacom 8% Telecom (incl. DCI) 68% Industrial Tech 24% Datacom 45% Telecom (incl. DCI) 45% Industrial Tech 10% Q2FY23 Revenue: $505.9M Revenue > $500M Future quarter
Page 32
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 32 © 2025 Lumentum Operations LLC 32 FY25 Consensus Revenue* Datacom Components (EML, CW & UHP) Datacom Tranceiver & OCS Telecom Incl. DCI Industrial Tech & Consumer $3B Annual Run Rate Incremental Revenue Growth Scenario to >$3B *Source: FactSet, March 26, 2025, consensus estimates on LITE Note: This is a target model and is not intended to represent guidance on actual outcomes. Actual results and timing is subject to the various assumptions and other risks and uncertainties. >$3.0B Majority of Revenue Growth from Cloud & AI customers$1.6B
Page 33
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 33 © 2025 Lumentum Operations LLC 33 Operating Margin Progression to >20% > 1,100 bps Operating Margin Expansion, Primarily Driven by Cloud & AI FY25 Consensus Op Margin* Datacom Components (EML, CW & UHP) Datacom Tranceiver & OCS Telecom Incl. DCI Industrial Tech & Consumer Op Margin at >$3B Annual Revenue >20% 8.4% *Source: FactSet, March 26, 2025, consensus estimates on LITE Note: This is a target model and is not intended to represent guidance on actual outcomes. Actual results and timing is subject to the various assumptions and other risks and uncertainties.
Page 34
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 34 © 2025 Lumentum Operations LLC 34 Target Financial Model FY25 Consensus Estimates* $600M Quarterly Revenue $750M Quarterly Revenue Annualized Revenue $1.6B $2.4B $3.0B Gross Margin 33.8% 37 – 40% 39 – 42% Operating Expenses ~25% ~20% ~18% Operating Margin 8.4% 17 – 20% >20% Driving Non-GAAP EPS to Expand Faster than Revenue Non-GAAP Model *Source: FactSet, March 26, 2025, consensus estimates on LITE Note: This is a target model and is not intended to represent guidance on actual outcomes. Actual results and timing is subject to the various assumptions and other risks and uncertainties.
Page 35
© 2024 Lumentum Operations LLC | LUMENTUM CONFIDENTIAL 35 © 2025 Lumentum Operations LLC 35 Key Takeaways Funding manufacturing capacity and R&D for cloud opportunities Structural cost savings & cloud growth will drive op margin expansion Driving to >$3B annual revenue at >20% operating margin
Page 36
© 2024 Lumentum Operations LLC 36 36 Q&A
Page 37
© 2024 Lumentum Operations LLC 37 37 Thank You