Lumentum Holdings Inc.LITE
Lumentum Holdings Inc. Segments Disclosure
Note 17. Operating Segments and Geographic Information
Our Chief Executive Officer is our Chief Operating Decision Maker (“CODM”). We have two operating segments, Cloud & Networking and Industrial Tech, which also represent our two reportable segments. The CODM allocates resources to the segments based on their business prospects, competitive factors, segment net revenue and segment profit. Segment profit includes operating expenses directly managed by operating segments, including research and development, and direct sales and marketing expenses. The CODM regularly reviews operating results to make decisions about resources to be allocated to the segments and to assess their performance.
Cloud & Networking
Our Cloud & Networking products comprise a comprehensive portfolio of optical and photonic chips, components, modules, and subsystems supplied to cloud data center operators, AI/ML infrastructure providers, and network equipment manufacturer customers who are building cloud data center and network infrastructures. Our products enable high-capacity optical links for cloud computing, AI/ML workloads, and data center interconnect (“DCI”) applications, as well as for communications service provider networks. Our offerings support access (local), metro (intracity), long-haul (intercity and global), and submarine (undersea) network infrastructure. Additionally, our Cloud & Networking products serve enterprise network infrastructure needs, including storage area networks (“SANs”), local area networks (“LANs”), and wide area networks (“WANs”). Demand for our products is fueled by the ongoing expansion of network capacity required to support cloud and services, AI/ML processing, streaming video, video conferencing, wireless and mobile connectivity, and the internet of things (“IoT”).
Industrial Tech
Our Industrial Tech products include short-pulse solid-state lasers, kilowatt-class fiber lasers, diode lasers, and gas lasers, serving a wide range of end-markets applications. In the consumer market, our laser light sources are integrated into customers’ 3D sensing cameras, primarily used in mobile devices. In the industrial manufacturing market, our lasers are embedded in machine tools used for precision material processing across diverse industries, including semiconductor and microelectronics fabrication, electric vehicle and battery production, metal cutting and welding, and advanced manufacturing. Adoption of our Industrial Tech products is driven by the need to advance semiconductor and microelectronics technology roadmaps and by Industry 4.0 and 5.0 trends that emphasize greater manufacturing precision, flexibility, and sustainability.
Reportable Segments
The two operating segments, Cloud & Networking and Industrial Tech, also represent our two reportable segments. Our CODM allocates resources and evaluates segment performance based on segment revenue and segment profit. The following table summarizes segment profit and a reconciliation to the consolidated loss before income taxes for the periods presented (in millions). Segment profit does not include stock-based compensation, acquisition or integration related costs, amortization and impairment of acquisition-related intangible assets, restructuring and related charges, and certain other charges. Additionally, we do not allocate corporate marketing and strategic marketing expenses and general and administrative expenses, as these expenses are not directly attributable to our operating segments. In addition, we do not track all of our property, plant and equipment by operating segments. Comparative prior period segment information has been recast to conform to the new segment structure.
Information on reportable segments utilized by our CODM is as follows (in millions):
| Years Ended | |||||||||||||||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | July 1, 2023 | |||||||||||||||||||||||||||||||||
| Cloud & Networking | Industrial Tech | Total | Cloud & Networking | Industrial Tech | Total | Cloud & Networking | Industrial Tech | Total | |||||||||||||||||||||||||||
| Net revenue | $ | 1,410.8 | 234.2 | $ | 1,645.0 | $ | 1,084.9 | 274.3 | $ | 1,359.2 | $ | 1,322.5 | 444.5 | $ | 1,767.0 | ||||||||||||||||||||
| Cost of sales | 924.4 | 149.2 | 1073.6 | 743.8 | 166.5 | 910.3 | 794.3 | 209.2 | 1003.5 | ||||||||||||||||||||||||||
| Segment gross profit | 486.4 | 85.0 | 571.4 | 341.1 | 107.8 | 448.9 | 528.2 | 235.3 | 763.5 | ||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Research and development | 194.7 | 61.3 | 256.0 | 192.4 | 68.0 | 260.4 | 181.8 | 67.2 | 249.0 | ||||||||||||||||||||||||||
| Selling, general and administrative | 27.2 | 11.6 | 38.8 | 24.20 | 14.70 | 38.9 | 33.2 | 15.4 | 48.6 | ||||||||||||||||||||||||||
| Segment profit | $ | 264.5 | 12.1 | 276.6 | $ | 124.5 | 25.1 | $ | 149.6 | $ | 313.2 | 152.7 | $ | 465.9 | |||||||||||||||||||||
Reconciliation of segment profit to consolidated loss before income taxes is as follows (in millions):
| Years Ended | |||||||||||||||||
| June 28, 2025 | June 29, 2024 | July 1, 2023 | |||||||||||||||
| Segment profit | $ | 276.6 | $ | 149.6 | $ | 465.9 | |||||||||||
Unallocated corporate items: | |||||||||||||||||
Selling, general and administrative (1) | (116.5) | (111.8) | (126.7) | ||||||||||||||
Stock-based compensation (2) | (177.2) | (128.8) | (136.5) | ||||||||||||||
| Stock-based compensation - acquisition related | — | — | (11.9) | ||||||||||||||
Amortization of acquired intangibles | (149.7) | (150.6) | (127.7) | ||||||||||||||
| Amortization of acquired inventory fair value adjustments | — | (8.3) | (17.8) | ||||||||||||||
| Acquisition related costs | (1.2) | (13.3) | (11.5) | ||||||||||||||
Integration related costs | (9.2) | (37.1) | (28.6) | ||||||||||||||
| Restructuring and related charges | (22.8) | (72.6) | (28.1) | ||||||||||||||
Abnormal excess capacity (3) | — | (20.7) | — | ||||||||||||||
| Litigation matters | — | — | (7.8) | ||||||||||||||
| Intangible asset write-off | (2.7) | — | (21.3) | ||||||||||||||
Gain on sale of facility (4) | 34.9 | — | — | ||||||||||||||
Other charges, net (5) | (12.3) | (40.4) | (63.7) | ||||||||||||||
| Interest expense | (22.2) | (33.8) | (35.5) | ||||||||||||||
Other income, net (6) | 30.2 | 62.1 | 48.8 | ||||||||||||||
| Consolidated loss before income taxes | $ | (172.1) | $ | (405.7) | $ | (102.4) | |||||||||||
(1) We do not allocate selling, general and administrative expenses that are not directly attributable to our operating segments.
2) Stock-based compensation for the year ended June 28, 2025 includes $28.2 million of stock-based compensation expense resulting from equity award modifications for our former President and Chief Executive Officer (“CEO”), which include RSUs and PSUs that were immediately expensed as of the separation date.
(3) Abnormal excess capacity for the year ended June 29, 2024 represents excess capacity attributable to a near-term reduction in our manufacturing production, primarily driven by our non-recurring inventory reduction effort following the disruptions in the supply chain due to the COVID-19 pandemic and factory consolidation efforts.
(4) Gain on sale of facility for the year ended June 28, 2025 represents a gain for net assets sold in an entity in Shenzhen, China, which consist primarily of building, building improvements and land rights.
(5) Other charges, net for the year ended June 28, 2025 mainly includes $12.2 million of legal and professional fees primarily related to non-ordinary course legal matters, $6.2 million of CEO transition costs, and $3.2 million of bad debt reserve related to the remaining unpaid balances due from Huawei associated with the trade restrictions, offset by a credit of $5.2 million associated with an audit settlement of indirect taxes for prior periods and a $5.0 million credit related to units sold that were previously written-down.
Other charges, net for the year ended June 29, 2024 primarily relate to $11.2 million of net excess and obsolete inventory, $12.4 million of non-recurring legal and professional fees, $4.9 million of incremental costs of sales related to components previously acquired from various brokers to satisfy customer demand and $3.4 million of one-time charge as a result of contract termination with one of our vendors due to a change in our manufacturing strategy, offset by various miscellaneous gains. The excess and obsolete inventory charges relate to charges that are not attributable to our operating segments due to their unusual nature, primarily those charges driven by U.S. trade restrictions whereby we are no longer able to sell certain products to one of our customers.
Other charges, net for the year ended July 1, 2023 primarily relate to $32.5 million of incremental costs of sales related to components previously acquired from various brokers to satisfy customer demand, $12.5 million of non-recurring legal and professional fees, $5.4 million of excess and obsolete inventory charges primarily driven by synergies as a result of the NeoPhotonics integration and $2.7 million of excess and obsolete inventory charges driven by U.S. trade restrictions and the related decline in demand from Huawei.
(6) Other income, net for the year ended June 28, 2025 includes interest and investment income of $34.4 million, and foreign exchange losses, net of $4.2 million.
Other income, net for the year ended June 29, 2024 includes interest and investment income of $61.3 million, and foreign exchange gains, net of $0.8 million.
Other income, net for the year ended July 1, 2023 includes interest and investment income of $40.8 million, foreign exchange gains, net of $7.0 million, and other income, net of $1.0 million.
Concentrations
We operate in three geographic regions: Americas, Asia-Pacific, and EMEA (Europe, Middle East, and Africa). Net revenue is assigned to the geographic region and country where our product is initially shipped to. For example, certain customers may request shipment of our product to a contract manufacturer in one country, which may differ from the location of their end customers. The following table presents net revenue by the three geographic regions we operate in and net revenue from countries that represented 10% or more of our total net revenue (in millions, except percentage data):
| Years Ended | |||||||||||||||||||||||||||||||||||
| June 28, 2025 | June 29, 2024 | July 1, 2023 | |||||||||||||||||||||||||||||||||
| Amount | % to Total | Amount | % to Total | Amount | % to Total | ||||||||||||||||||||||||||||||
| Net revenue: | |||||||||||||||||||||||||||||||||||
| Americas: | |||||||||||||||||||||||||||||||||||
United States | $ | 312.3 | 19.0 | % | $ | 356.1 | 26.2 | % | $ | 241.3 | 13.7 | % | |||||||||||||||||||||||
| Mexico | 148.5 | 9.0 | 91.7 | 6.7 | 180.0 | 10.2 | |||||||||||||||||||||||||||||
Other Americas | 20.1 | 1.2 | 3.4 | 0.3 | 9.3 | 0.5 | |||||||||||||||||||||||||||||
Total Americas | $ | 480.9 | 29.2 | % | $ | 451.2 | 33.2 | % | $ | 430.6 | 24.4 | % | |||||||||||||||||||||||
| Asia-Pacific: | |||||||||||||||||||||||||||||||||||
| Thailand | $ | 291.8 | 17.7 | % | $ | 183.8 | 13.5 | % | $ | 269.0 | 15.2 | % | |||||||||||||||||||||||
Hong Kong | 398.6 | 24.2 | 261.9 | 19.3 | 246.7 | 14.0 | |||||||||||||||||||||||||||||
South Korea | 32.4 | 2.0 | 75.2 | 5.5 | 170.2 | 9.6 | |||||||||||||||||||||||||||||
Japan | 78.3 | 4.8 | 84.6 | 6.2 | 179.5 | 10.2 | |||||||||||||||||||||||||||||
Other Asia-Pacific | 199.5 | 12.2 | 174.3 | 12.9 | 276.3 | 15.6 | |||||||||||||||||||||||||||||
Total Asia-Pacific | $ | 1,000.6 | 60.9 | % | $ | 779.8 | 57.4 | % | $ | 1,141.7 | 64.6 | % | |||||||||||||||||||||||
| EMEA | $ | 163.5 | 9.9 | % | $ | 128.2 | 9.4 | % | $ | 194.7 | 11.0 | % | |||||||||||||||||||||||
Total net revenue | $ | 1,645.0 | 100.0 | % | $ | 1,359.2 | 100.0 | % | $ | 1,767.0 | 100.0 | % | |||||||||||||||||||||||
During the years ended June 28, 2025, June 29, 2024, and July 1, 2023, net revenue generated from a single customer which represented 10% or greater of total net revenue is summarized as follows:
| Years Ended | |||||||||||||||||
| June 28, 2025 | June 29, 2024 | July 1, 2023 | |||||||||||||||
| Customer A | 16.0 | % | 11.4 | % | 15.3 | % | |||||||||||
| Customer B | 15.4 | % | 18.9 | % | * | ||||||||||||
| Customer C | * | * | 12.1 | % | |||||||||||||
| Customer D | * | * | 10.5 | % | |||||||||||||
| *Represents less than 10% of total net revenue | |||||||||||||||||
The following table sets forth accounts receivable from a single customer that represented 10% or greater of the total accounts receivable for the periods presented:
| June 28, 2025 | June 29, 2024 | ||||||||||
| Customer 1 | 13.2 | % | 12.9 | % | |||||||
| Customer 2 | 11.0 | % | * | ||||||||
| *Represents less than 10% of total accounts receivable | |||||||||||
Long-lived assets, namely property, plant and equipment, net, were identified based on the physical location of the assets in the corresponding geographic areas as of the periods indicated (in millions):
| June 28, 2025 | June 29, 2024 | ||||||||||
| Property, plant and equipment, net | |||||||||||
United States | $ | 123.0 | $ | 131.0 | |||||||
Thailand | 218.6 | 141.0 | |||||||||
| Japan | 144.3 | 75.7 | |||||||||
| United Kingdom | 109.4 | 83.8 | |||||||||
| China | 76.8 | 85.7 | |||||||||
Other countries | 54.3 | 55.3 | |||||||||
| Total property, plant and equipment, net | $ | 726.4 | $ | 572.5 | |||||||
We purchase a portion of our inventory from contract manufacturers and vendors located primarily in Thailand, Taiwan and Malaysia. The following table sets forth inventory purchase from a single contract manufacturer that represented 10% or greater of our total net inventory purchases for the periods presented:
| June 28, 2025 | June 29, 2024 | ||||||||||
| Contract Manufacturer A | 25.1 | % | 30.3 | % | |||||||
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 | |
| 2019 | Aug 27, 2019 | |
| 2018 | Aug 28, 2018 | |
| 2017 | Aug 29, 2017 | |
| 2016 | Sep 2, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.