Lumentum Announces Fiscal Fourth Quarter and Full Year 2022 Results

Fiscal Fourth Quarter Highlights:

• Net revenue of $422.1 million
• GAAP operating margin of 13.1%; Non-GAAP operating margin of 28.8%
• GAAP diluted net income per share of $0.49; Non-GAAP diluted net income per share of  $1.47

Fiscal Year 2022 Highlights:

• Net revenue of $1.7 billion
• GAAP operating margin of 17.7%; Non-GAAP operating margin of 30.8%
• GAAP diluted net income per share of $2.68; Non-GAAP diluted net income per share of  $6.05

SAN JOSE, Calif. -- Lumentum Holdings Inc. ("Lumentum" or the "Company") today reported results for its fiscal fourth quarter and full year ended July 2, 2022.

"In fiscal 2022, we achieved record revenue in datacom EMLs, coherent components, pump lasers, tunable products, and sub-sea components, with company profitability above our target model of 50 percent gross margin and 30 percent operating margin. Fourth quarter revenue was above our midpoint, with both operating margin and earnings per share exceeding the top end of guidance. In addition, we are making meaningful progress in alleviating component shortages in our Telecom business," said Alan Lowe, President and CEO.

"On August 3rd, we completed our acquisition of NeoPhotonics, and yesterday we announced our purchase of IPG's telecom transmission product lines, both of which position us to create even more value for our cloud and networking customers. Our guidance for the first quarter and outlook for fiscal 2023 reflects the previously discussed share normalization in 3D sensing for smartphones. As we close a solid year and position the company for growth with these investments, we expect that the business fundamentals will drive a mix shift toward our Telecom, Datacom, and Commercial Lasers businesses, supporting double-digit revenue growth in fiscal 2023 and beyond," added Mr. Lowe.

Fiscal Fourth Quarter Highlights:

Net revenue for the fiscal fourth quarter of 2022 was $422.1 million, with GAAP net income attributable to common stockholders of $34.7 million, or $0.49 per diluted share. Net revenue for the fiscal third quarter of 2022 was $395.4 million, with GAAP net income of $26.0 million, or $0.35 per diluted share. Net revenue for the fiscal fourth quarter of 2021 was $392.1 million, with GAAP net income attributable to common stockholders of $21.5 million, or $0.28 per diluted share.

Non-GAAP net income for fiscal fourth quarter of 2022 was $105.0 million, or $1.47 per diluted share. Non-GAAP net income for fiscal third quarter of 2022 was $88.9 million, or $1.19 per diluted share. Non-GAAP net income for the fiscal fourth quarter of 2021 was $81.9 million, or $1.06 per diluted share.

The Company held $2,549.0 million in total cash, cash equivalents, and short-term investments at the end of the fiscal fourth quarter of 2022, down $15.1 million from the third quarter of 2022.

Full Fiscal Year 2022 Highlights:

Net revenue for fiscal year 2022 was $1,712.6 million, with GAAP net income attributable to common stockholders of $198.9 million, or $2.68 per diluted share. Net revenue for fiscal year 2021 was $1,742.8 million, with GAAP net income attributable to common stockholders of $397.3 million, or $5.07 per diluted share.

Non-GAAP net income for fiscal year 2022 was $449.2 million, or $6.05 per diluted share. Non-GAAP net income for fiscal year 2021 was $458.2 million, or $5.84 per diluted share.

The Company held $2,549.0 million in total cash, cash equivalents, and short-term investments at the end of the fiscal fourth quarter of 2022, up $603.0 million from the fourth quarter of 2021. In March 2022, we issued $861.0 million in aggregate principal amount of 0.50% Convertible Notes due in 2028 ("the 2028 Notes"). The net proceeds from the sale of the 2028 Notes were $854.1 million, after deducting $6.9 million in issuance costs and professional fees. Concurrent with the issuance of the 2028 Notes, we used $200.0 million of the net proceeds to repurchase 2.0 million shares of our common stock in privately negotiated transactions. In addition, we repurchased 4.0 million shares of our common stock for an aggregate purchase price of $348.9 million during fiscal 2022 under the board-authorized share buyback program. As of the end of the fiscal year 2022, we have $410.2 million remaining under the share buyback program.  Cash from operations for the fiscal year of 2022 was $459.3 million.

Business Outlook

Lumentum expects the following for the fiscal first quarter of 2023:

• Net revenue in the range of $490 million to $520 million
• Non-GAAP operating margin of 25.0% to 27.0% 
• Non-GAAP diluted earnings per share of $1.45 to $1.70

We have not provided reconciliations from GAAP to non-GAAP measures for our outlook. A large portion of non-GAAP adjustments, such as restructuring charges, stock-based compensation, non-cash income tax expense and credits, integration related costs, and other costs 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. The non-GAAP diluted earnings per share forecast is based on an estimated share count of 71.5 million utilizing the treasury stock method.