Lumentum Holdings Inc.LITE
Lumentum Holdings Inc. Goodwill & Intangibles Disclosure
Note 9. Goodwill and Other Intangible Assets
Goodwill
In November 2023, we completed the acquisition of Cloud Light. We recognized goodwill of $365.8 million, which was allocated to the Cloud & Networking segment.
In the first quarter of fiscal year 2023, we completed two acquisitions, our acquisition of NeoPhotonics and the acquisition of IPG telecom transmission product lines. We recognized goodwill of $315.3 million related to the NeoPhotonics acquisition and $10.9 million related to the acquisition of the IPG telecom transmission product lines as of July 1, 2023. We allocated the entire goodwill amount in connection with these two acquisitions to the Cloud & Networking segment.
The following table presents our goodwill balance by the reportable segments as of June 28, 2025 and June 29, 2024 (in millions):
| Cloud & Networking | Industrial Tech | Total | ||||||||||||||||||
| Balance as of July 1, 2023 | $ | 683.9 | $ | 11.2 | $ | 695.1 | ||||||||||||||
Acquisition of Cloud Light (1) | 360.7 | — | 360.7 | |||||||||||||||||
| Balances as of June 29, 2024 | $ | 1,044.6 | $ | 11.2 | $ | 1,055.8 | ||||||||||||||
Acquisition of Cloud Light (2) | 5.1 | — | 5.1 | |||||||||||||||||
| Balances as of June 28, 2025 | $ | 1,049.7 | $ | 11.2 | $ | 1,060.9 | ||||||||||||||
(1) We recorded $359.5 million of goodwill as of the acquisition date and $1.2 million of measurement period adjustments to increase goodwill during the year ended June 29, 2024.
(2) During the year ended June 28, 2025, prior to the end of the measurement period, we adjusted the purchase price allocation and recorded a $5.1 million increase to goodwill. The primary adjustment to the opening balance sheet relates to income tax liabilities which were not known in previous periods.
Impairment of Goodwill
We review goodwill for impairment during the fourth quarter of each fiscal year or more frequently if events or circumstances indicate that an impairment loss may have occurred. Based on the impairment analysis performed in the fourth quarter of each year presented, the fair value of each of our reporting units substantially exceeded the carrying value; as such, our annual qualitative assessment did not indicate that a more detailed quantitative analysis was necessary.
Other Intangibles
Our intangible assets are amortized on a straight-line basis over the estimated useful lives, except for certain customer relationships, which are amortized using an accelerated method of amortization over the expected customer lives, more accurately reflecting the pattern of realization of economic benefits we expect to derive. Acquired developed technologies are amortized to cost of sales and research and development expenses. Acquired customer relationships are amortized to selling, general and administrative expenses in the consolidated statement of operations.
IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When an IPR&D project is completed, the IPR&D is reclassified to an amortizable purchased intangible asset and amortized over the asset’s estimated useful life.
During the annual impairment testing performed in the fourth quarter of each year presented, we concluded that our intangible and other long-lived assets were not impaired at the asset group level. We review our intangible and other long-lived assets for impairment at least annually in the fourth quarter of each fiscal year, absent any interim indicators of impairment. There were no indicators of impairment at the asset group level during the years ended June 28, 2025 and June 29, 2024.
In November 2023, we completed the acquisition of Cloud Light. The intangible assets acquired from the acquisition were as follows as of the acquisition date (in millions, except for weighted average amortization period):
| Fair Value at the Acquisition Date | Weighted Average Amortization Period (Years) | ||||||||||
| Acquired developed technologies | $ | 170.0 | 7.0 | ||||||||
| Customer relationships | 130.0 | 7.0 | |||||||||
| In-process research and development | 16.0 | n/a | |||||||||
| Order backlog | 14.0 | 1.0 | |||||||||
| Trade name and trademarks | 3.0 | 1.2 | |||||||||
| Total intangible assets | $ | 333.0 | |||||||||
During the years ended June 28, 2025 and June 29, 2024, we reclassified $4.3 million and $10.3 million, respectively, of IPR&D intangible assets acquired from Cloud Light to acquired developed technologies for IPR&D projects that were completed during the periods. We recorded $0.2 million and $0.1 million of related amortization expense in our consolidated statements of operations during the years ended June 28, 2025 and June 29, 2024, respectively.
The following tables present details of all of our intangibles, including those acquired in connection with our acquisitions in fiscal year 2024 and fiscal year 2023, as of the periods presented (in millions, except for weighted average remaining amortization period):
| June 28, 2025 | Gross Carrying Amounts | Accumulated Amortization | Net Carrying Amounts | Weighted average remaining amortization period (years) | |||||||||||||||||||
| Acquired developed technologies | $ | 822.4 | $ | (559.0) | $ | 263.4 | 4.1 | ||||||||||||||||
| Customer relationships | 419.8 | (226.6) | 193.2 | 4.1 | |||||||||||||||||||
| In-process research and development | 8.5 | — | 8.5 | n/a | |||||||||||||||||||
| Order backlog | 14.0 | (14.0) | — | — | |||||||||||||||||||
| Trade name and trademarks | 3.0 | (3.0) | — | — | |||||||||||||||||||
| Total intangible assets | $ | 1,267.7 | $ | (802.6) | $ | 465.1 | |||||||||||||||||
During the year ended June 28, 2025, we recorded a $2.7 million write-off of IPR&D intangible assets for projects we will no longer pursue, which includes $2.0 million from the NeoPhotonics acquisition and $0.6 million from the Cloud Light acquisition. We recognized this charge as research and development expense in our consolidated statements of operations during the year ended June 28, 2025.
| June 29, 2024 | Gross Carrying Amounts | Accumulated Amortization | Net Carrying Amounts | Weighted average remaining amortization period (years) | |||||||||||||||||||
| Acquired developed technologies | $ | 818.1 | $ | (473.0) | $ | 345.1 | 4.8 | ||||||||||||||||
| Customer relationships | 419.8 | (169.4) | 250.4 | 4.9 | |||||||||||||||||||
| In-process research and development | 15.5 | — | 15.5 | n/a | |||||||||||||||||||
| Order backlog | 14.0 | (8.9) | 5.1 | 0.4 | |||||||||||||||||||
| Trade name and trademarks | 3.0 | (1.6) | 1.4 | 0.6 | |||||||||||||||||||
| Total intangible assets | $ | 1,270.4 | $ | (652.9) | $ | 617.5 | |||||||||||||||||
During the year ended June 29, 2024, we reclassified $1.9 million of IPR&D intangible assets acquired from NeoPhotonics to acquired developed technologies for IPR&D projects that were completed during the period and recorded $0.3 million of related amortization expense in our consolidated statements of operations during the year ended June 29, 2024.
During the year ended June 29, 2024, we discontinued our in-house development of coherent DSPs and RFICs. As a result, we recorded $35.8 million of during the fiscal fourth quarter of 2024, which included a $29.1 million write-off of IPR&D assets acquired as part of the acquisition of IPG telecom transmission product lines, as well as $6.7 million of contract exit costs and asset write-offs.
During fiscal years 2025, 2024 and 2023, we recorded $149.7 million, $150.6 million and $127.7 million, respectively, of amortization related to intangibles assets.
The following table presents details of amortization for the periods presented (in millions):
| Years ended | |||||||||||||||||
| June 28, 2025 | June 29, 2024 | July 1, 2023 | |||||||||||||||
| Cost of sales | $ | 82.2 | $ | 83.9 | $ | 84.4 | |||||||||||
| Selling, general and administrative | 65.9 | 65.2 | 43.3 | ||||||||||||||
| Research and development | 1.6 | 1.5 | — | ||||||||||||||
| Total amortization of intangibles | $ | 149.7 | $ | 150.6 | $ | 127.7 | |||||||||||
Based on the carrying amount of our intangible assets as of June 28, 2025, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows (in millions):
| Fiscal Years | |||||
| 2026 | $ | 135.0 | |||
| 2027 | 122.7 | ||||
| 2028 | 82.1 | ||||
| 2029 | 51.8 | ||||
| 2030 | 45.8 | ||||
| Thereafter | 19.2 | ||||
| Total | $ | 456.6 | |||
The table above excludes in-process research and development intangible assets.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 19, 2025 | Showing above |
| 2024 | Aug 21, 2024 | |
| 2023 | Aug 23, 2023 | |
| 2022 | Aug 24, 2022 | |
| 2021 | Aug 31, 2021 | |
| 2020 | Aug 25, 2020 | |
| 2018 | Aug 28, 2018 | |
| 2017 | Aug 29, 2017 | |
| 2016 | Sep 2, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.