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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
 
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 28, 2024
 OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
 Commission File Number 001-36861
Lumentum Holdings Inc.
(Exact name of Registrant as specified in its charter)
Delaware 47-3108385
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification Number)
1001 Ridder Park Drive, San Jose, California 95131
(Address of principal executive offices including Zip code)
(408) 546-5483
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value of $0.001 per shareLITENasdaq Global Select Market
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x        No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes x    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated fileroNon-accelerated fileroSmaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
As of October 31, 2024, the Registrant had 68.7 million shares of common stock outstanding.




TABLE OF CONTENTS
Page

1

PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(Unaudited)
Three Months Ended
 September 28, 2024September 30, 2023
Net revenue$336.9 $317.6 
Cost of sales236.5 222.9 
Amortization of acquired developed intangibles 22.5 18.0 
Gross profit77.9 76.7 
Operating expenses:
    Research and development74.3 73.5 
    Selling, general and administrative76.3 73.0 
    Restructuring and related charges9.7 11.0 
Total operating expenses160.3 157.5 
Loss from operations(82.4)(80.8)
Interest expense(5.5)(9.7)
Other income, net8.7 21.2 
Loss before income taxes(79.2)(69.3)
Income tax provision (benefit)3.2 (1.4)
Net loss$(82.4)$(67.9)
Net loss per share:
    Basic$(1.21)$(1.02)
    Diluted$(1.21)$(1.02)
Shares used to compute net loss per share:
    Basic 68.3 66.7 
    Diluted68.3 66.7 
    

See accompanying Notes to Condensed Consolidated Financial Statements.
2
LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in millions)
(Unaudited)

 Three Months Ended
 September 28, 2024September 30, 2023
Net loss$(82.4)$(67.9)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments— (0.2)
Net change in unrealized gain on available-for-sale securities2.3 1.3 
Other comprehensive income, net of tax2.3 1.1 
Comprehensive loss, net of tax$(80.1)$(66.8)

See accompanying Notes to Condensed Consolidated Financial Statements.

3
LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except par value)
(Unaudited)


September 28, 2024June 29, 2024
ASSETS  
Current assets: 
Cash and cash equivalents$489.2 $436.7 
Short-term investments426.9 450.3 
Accounts receivable, net 198.5 194.7 
Inventories403.3 398.4 
Prepayments and other current assets118.3 110.0 
Total current assets1,636.2 1,590.1 
Property, plant and equipment, net638.4 572.5 
Operating lease right-of-use assets, net35.7 72.8 
Goodwill1,060.9 1,055.8 
Other intangible assets, net573.9 617.5 
Deferred tax asset12.5 10.7 
Other non-current assets12.0 12.5 
Total assets$3,969.6 $3,931.9 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$163.1 $126.3 
Accrued payroll and related expenses42.0 36.1 
Accrued expenses39.7 52.4 
Current portion of long-term debt10.8 — 
Operating lease liabilities, current11.9 13.4 
Other current liabilities37.6 41.1 
Total current liabilities305.1 269.3 
Long-term debt2,569.2 2,503.2 
Operating lease liabilities, non-current29.8 43.0 
Deferred tax liability53.4 55.7 
Other non-current liabilities116.2 103.4 
Total liabilities3,073.7 2,974.6 
Commitments and contingencies (Note 14)
Stockholders’ equity:
Common stock, $0.001 par value, 990 authorized shares, 68.6 and 67.9 shares issued and outstanding as of September 28, 2024 and June 29, 2024, respectively
0.1 0.1 
Additional paid-in capital1,853.7 1,835.0 
Accumulated deficit(969.5)(887.1)
Accumulated other comprehensive income11.6 9.3 
Total stockholders’ equity895.9 957.3 
Total liabilities and stockholders’ equity$3,969.6 $3,931.9 
 
See accompanying Notes to Condensed Consolidated Financial Statements.

4
LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Three Months Ended
September 28, 2024September 30, 2023
OPERATING ACTIVITIES:
Net loss$(82.4)$(67.9)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation expense27.0 28.2 
Stock-based compensation 35.6 32.1 
Amortization and write-off of acquired intangibles43.6 29.0 
Loss on sales and dispositions of property, plant and equipment0.2 1.4 
Amortization of debt discount and debt issuance costs0.7 4.9 
Write-off of right-of-use assets5.3 — 
Other non-cash items(0.3)(5.7)
Changes in operating assets and liabilities:
Accounts receivable(3.8)26.1 
Inventories(6.5)(16.8)
Operating lease right-of-use assets, net(0.2)3.7 
Prepayments and other current and non-currents assets(16.6)7.3 
Income taxes, net7.2 (19.9)
Accounts payable32.6 (28.0)
Accrued payroll and related expenses5.9 1.5 
Operating lease liabilities1.0 (4.0)
Accrued expenses and other current and non-current liabilities(9.7)5.8 
Net cash provided by (used in) operating activities39.6 (2.3)
INVESTING ACTIVITIES:
Payments for acquisition of property, plant and equipment(74.1)(57.8)
Purchases of short-term investments(63.9)(149.1)
Proceeds from maturities and sales of short-term investments90.7 227.7 
Payments for acquisition of intangible assets— (3.0)
Proceeds from the sales of property, plant and equipment0.2 — 
Net cash (used in) provided by investing activities(47.1)17.8 
FINANCING ACTIVITIES:
Payment of withholding taxes related to net share settlement of restricted stock units
(16.0)(12.9)
Proceeds from term loans76.5 — 
Proceeds from the exercise of stock options0.9 — 
Principal payments on term loans(0.4)— 
Payment of acquisition related holdback(1.0)— 
Net cash provided by (used in) financing activities60.0 (12.9)
Decrease in cash and cash equivalents52.5 2.6 
Cash and cash equivalents at beginning of period 436.7 859.0 
Cash and cash equivalents at end of period$489.2 $861.6 
Supplemental disclosure of cash flow information:
Cash paid (refund) for taxes, net$(4.2)$18.5 
Cash paid for interest 0.1 0.6 
Supplemental disclosure of non-cash investing and financing activities:
Unpaid property, plant and equipment in accounts payable and accrued expenses15.9 4.2 
Unpaid intangible assets in accrued expenses— 2.0 
Right-of-use assets obtained in exchange for new operating lease liabilities3.7 — 
See accompanying Notes to Condensed Consolidated Financial Statements.
5
LUMENTUM HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in millions)
(Unaudited)

Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated
Other Comprehensive Income 		Total Stockholders' Equity
SharesAmount
Balance as of June 29, 202467.9$0.1 $1,835.0 $(887.1)$9.3 $957.3 
Net loss— — — (82.4)— (82.4)
Other comprehensive income— — — — 2.3 2.3 
Issuance of shares in connection with vesting of restricted stock units and performance stock units0.9 — — — — — 
Withholding taxes related to net share settlement of restricted stock units(0.3)— (16.0)— — (16.0)
Exercise of stock options0.1 — 0.9 — — 0.9 
Stock-based compensation— — 33.8 — — 33.8 
 Balance as of September 28, 202468.6$0.1 $1,853.7 $(969.5)$11.6 $895.9 

Common StockAdditional Paid-In CapitalAccumulated DeficitAccumulated
Other Comprehensive Income		Total Stockholders' Equity
SharesAmount
Balance as of July 1, 202366.4 $0.1 $1,692.2 $(340.6)$4.1 $1,355.8 
Net loss— — — (67.9)— (67.9)
Other comprehensive income— — — — 1.1 1.1 
Issuance of shares in connection with vesting of restricted stock units and performance stock units0.8 — — — — — 
Withholding taxes related to net share settlement of restricted stock units(0.2)— (12.9)— — (12.9)
Stock-based compensation— — 34.7 — — 34.7 
Balance as of September 30, 202367.0 $0.1 $1,714.0 $(408.5)$5.2 $1,310.8 

See accompanying Notes to Condensed Consolidated Financial Statements.

6
LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Description of Business and Summary of Significant Accounting Policies
Description of Business
Lumentum Holdings Inc. (“we,” “us,” “our,” “Lumentum” or the “Company”) is an industry-leading provider of optical and photonic products essential to a range of cloud, artificial intelligence and machine learning (“AI/ML”), telecommunications, consumer, and industrial end-market applications. We operate in two end-market focused reportable segments, Cloud & Networking and Industrial Tech.
Our Cloud & Networking products include a comprehensive portfolio of optical and photonic chips, modules, and subsystems supplied to cloud data center operator, AI/ML infrastructure provider, and network equipment manufacturer customers who are building cloud data center and network infrastructures. Our products enable high-capacity optical data links in cloud, AI/ML, and data center interconnect (“DCI”) applications, and communications service provider networks, including in access (local), metro (intracity), long-haul (city-to-city and worldwide), and submarine (undersea) network infrastructure. Our Cloud & Networking products also support network equipment manufacturers building enterprise network infrastructure, including storage-area networks (“SANs”), local-area networks (“LANs”) and wide-area networks (“WANs”). Demand for our Cloud & Networking products is driven by the continual growth in network capacity required for cloud computing and services, including for AI/ML, streaming video and video conferencing, wireless and mobile devices, and internet of things (“IoT”).
Our Industrial Tech products include short pulse solid-state lasers, kilowatt-class fiber lasers, diode lasers, and gas lasers, which address applications in numerous end-markets. In the consumer end-market, our laser light sources are integrated into our customers’ 3D sensing cameras, which are used in mobile devices, payment kiosks, and other consumer electronics devices to enable applications including biometric identification, computational photography and virtual and augmented reality. In the automotive end-market, our lasers are used in our customers’ LiDAR and other optical sensor devices, which are increasingly being used in advanced driver assistance systems (“ADAS”) and in-cabin driver and occupant monitoring systems. In the industrial manufacturing end-market, our lasers are incorporated into our customers’ manufacturing machine tools used for the precision processing of materials in a range of industries including semiconductor device and microelectronics fabrication, electric vehicle and battery production, metal cutting and welding, and advanced manufacturing. Our products can also be used in the industrial end-market in imaging and sensing systems for process feedback and control, quality assurance, and waste reduction. Adoption of our products in the industrial end-market is driven by the needs of customers to advance semiconductor and microelectronics industry roadmaps, and by Industry 4.0/5.0 trends, including increasing manufacturing precision and flexibility and reducing waste and environmental impact. Demand for our products in the industrial end-market is driven by end-customer investments in manufacturing capacity. Our lasers also address certain semiconductor inspection and life-science applications.
Basis of Presentation
We have prepared the accompanying condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”), which requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, actual results may be different from the estimates. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. In the opinion of the Company’s management, the information presented herein reflects all normal and recurring adjustments necessary for a fair presentation of our results of operations, financial position, stockholders’ equity, and cash flows. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective, or complex judgments by management. Those policies are inventory valuation, revenue recognition, income taxes, goodwill, and business combinations.
Our business and operating results depend significantly on general market and economic conditions. The current global macroeconomic environment is volatile and continues to be adversely impacted by inflation, a dynamic supply chain and demand environment, and signs of a weaker macroeconomic environment impacting capital expenditures across our served markets. Additionally, instability in the global credit markets, capital expenditure reductions, unemployment and other labor issues, decline in stock markets, the instability in the geopolitical environment in many parts of the world, and the current global economic challenges continue to put pressure on our business and operating results.
7
LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
We are continuously monitoring both the current developments in the ongoing Russia-Ukraine war including the related export controls and resulting sanctions imposed on Russia and Belarus by the U.S. and other countries, and the ongoing conflicts in the Middle East. Additional factors, such as increased inflation, escalating energy prices and the related cost increases, could continue to impact the global economy and our business. Although the global implications of these wars are difficult to predict at this time, we do not presently foresee direct material adverse effects on our business.
Business Combinations
On November 7, 2023, we completed the acquisition of Cloud Light Technology Limited (“Cloud Light”). We have applied the acquisition method of accounting to account for this transaction in accordance with ASC Topic 805, Business Combinations. Our condensed consolidated financial statements include the operating results of the acquired entities from the acquisition close date. Refer to “Note 4. Business Combinations” for further discussions of this transaction.
Fiscal Years
We utilize a 52-53 week fiscal year ending on the Saturday closest to June 30th. Every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the third quarter, making such quarter consist of 14 weeks. Our fiscal 2025 is a 52-week year ending on June 28, 2025, with the quarter ended September 28, 2024 being a 13-week quarterly period. Our fiscal 2024 was a 52-week year that ended on June 29, 2024, with the quarter ended September 30, 2023 being a 13-week quarterly period.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Lumentum Holdings Inc. and its wholly owned subsidiaries. All inter-company transactions and balances are eliminated in consolidation. 
Accounting Policies
The condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended June 29, 2024. There were no significant changes to our accounting policies during the three months ended September 28, 2024.
Note 2. Recently Issued Accounting Pronouncements
In March 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-02: Codification Improvements - Amendments to Remove References to the Concepts Statements, which contains amendments to the Codification that remove references to various FASB Concepts Statements. ASU 2024-02 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We do not expect this ASU to have a material impact on our consolidated financial statements and disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income tax paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of this ASU on our income tax disclosures within the consolidated financial statements.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 does not change how a public entity identifies its operating segments, aggregates those operating segments, or applies quantitative thresholds to determine its reportable segments. The update is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. We plan to adopt ASU 2023-07 in the fiscal fourth quarter of 2025. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and disclosures.
8
LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 3. Earnings Per Share
The following table sets forth the computation of basic and diluted net loss per share (in millions, except per share data):
 Three Months Ended
 September 28, 2024September 30, 2023
Numerator:  
Net loss - basic and diluted$(82.4)$(67.9)
Denominator:
Weighted average common shares outstanding - basic and diluted68.3 66.7 
Net loss per share:
Basic$(1.21)$(1.02)
Diluted$(1.21)$(1.02)
Anti-dilutive shares excluded from the calculation of diluted net loss per share for the three months ended September 28, 2024 include 4.8 million shares issuable under restricted stock units (“RSUs”) and performance stock units (“PSUs”), 0.1 million shares issuable under the Employee Stock Purchase Plan (the “2015 Purchase Plan”), and 1.0 million shares outstanding related to stock options. Refer to “Note 13. Equity.”
Anti-dilutive shares excluded from the calculation of diluted net loss per share for the three months ended September 30, 2023 include 31.2 million shares related to convertible notes, 4.6 million shares issuable under RSUs and PSUs, and 0.2 million shares issuable under the 2015 Purchase Plan.
Potentially dilutive common shares issuable upon conversion of our outstanding convertible notes are determined using the if-converted method.
Note 4. Business Combinations
Cloud Light Acquisition
On October 29, 2023, we entered into a definitive merger agreement (the “Merger Agreement”) with Cloud Light. On November 7, 2023 (the “Cloud Light Closing Date”), we completed the acquisition of Cloud Light. Cloud Light designs, markets, and manufactures advanced optical modules for data center interconnect applications. The acquisition enables us to be well-positioned to serve the growing needs of cloud & networking customers, particularly those customers focused on optimizing their data center infrastructure for the demands of AI/ML.
We have applied the acquisition method of accounting in accordance with ASC 805 Business Combinations, with respect to the fair value of purchase price consideration and the identifiable assets and liabilities of Cloud Light, which have been measured at estimated fair value as of the Cloud Light Closing Date. The following tables summarize the purchase price consideration (in millions):
Fair Value
Cash consideration (1)
$705.0 
Share-based consideration (2)
23.5 
Total purchase price consideration$728.5 
(1) Under the terms of the Merger Agreement, Cloud Light stockholders received $1.69 per share after adjusting for applicable withholding taxes, escrow fund and expense fund contributions, for each of the 409.4 million of shares outstanding at the Cloud Light Closing Date. As a result, we transferred $691.7 million of cash consideration on the Cloud Light Closing Date. Additionally, each of Cloud Light’s outstanding options was exchanged for a combination of up-front cash consideration and newly issued options (the “replacement options”). As a result, we transferred $13.3 million of cash consideration on the Cloud Light Closing Date.
9
LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(2) The replacement options have a total fair value of $38.9 million as of the Cloud Light Closing Date, of which $23.5 million attributed to pre-acquisition service is recorded as part of the purchase price consideration and the remaining $15.4 million is recorded as post-acquisition stock-based compensation expense over the vesting period of three years from the Cloud Light Closing Date. In general, these options expire within 10 years from the Cloud Light Closing Date. Refer to “Note 13. Equity”.
The cash consideration of $705.0 million, which was funded by the cash balances of Lumentum, includes $75.8 million of cash held in an escrow fund to support Cloud Light’s indemnification obligations under the Merger Agreement and customary adjustment for working capital. Since the the measurement period expired, any future adjustments will be included in our earnings. As of the date of this filing, no amount of the escrow funds have been released.
We incurred a total of $9.6 million of acquisition-related costs in fiscal year 2024, of which $2.4 million was incurred during the three months ended September 30, 2023, representing professional and other direct acquisition costs, which are recorded as selling, general and administrative expense in the condensed consolidated statement of operations when incurred.
10
LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
We allocated the fair value of the purchase price consideration to the assets acquired and liabilities assumed as of the Cloud Light Closing Date based on their estimated fair values. The excess of purchase price consideration over the fair value of net assets acquired is recorded as goodwill. Our final allocation of the purchase price consideration to the assets acquired and liabilities assumed as of the Cloud Light Closing Date is as follows (in millions):
Fair Value
Total purchase price consideration$728.5 
Assets acquired
Cash and cash equivalents4.1 
Short-term investments1.0 
Accounts receivable, net20.9 
Inventories72.8 
Prepayments and other current assets14.2 
Property, plant and equipment, net62.5 
Operating lease right-of-use assets, net3.7 
Other intangible assets, net (1)
333.0 
Other non-current assets0.3 
Total assets512.5 
Liabilities assumed
Accounts payable45.5 
Accrued payroll and related expenses5.6 
Accrued expenses7.9 
Operating lease liabilities, current1.8 
Other current liabilities10.3 
Operating lease liabilities, non-current1.9 
Deferred tax liability60.6 
Other non-current liabilities16.2 
Total liabilities149.8 
Goodwill$365.8 
(1) Other intangible assets include developed technology of $170.0 million, customer relationship of $130.0 million, in-process research and development (“IPR&D”) of $16.0 million, order backlog of $14.0 million, and trade name and trademarks of $3.0 million. Refer to “Note 8. Goodwill and Other Intangible Assets” for more information.
Goodwill from the Cloud Light acquisition has been assigned to the Cloud & Networking segment. The goodwill of $365.8 million arising from the acquisition is attributed to the expected revenue growth and synergies, including future cost efficiencies and other benefits that are expected to be generated by combining Lumentum and Cloud Light. None of the goodwill is expected to be deductible for local tax purposes. Refer to “Note 8. Goodwill and Other Intangible Assets.”
Cloud Light contributed $38.2 million of our consolidated net revenue for the three months ended September 28, 2024. Due to the continued integration of the combined businesses, as well as our corporate structure and the allocation of selling, general and administrative costs, it is impracticable to determine Cloud Light’s contribution to our earnings the three months ended September 28, 2024.
11
LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Supplemental Pro Forma Information
The following supplemental pro forma information presents the combined results of operations for the three months ended September 28, 2024 and September 30, 2023, as if the acquisition was completed on July 3, 2022, the first day of the fiscal year 2023. The supplemental pro forma financial information presented below is not necessarily indicative of the financial position or results of operations that would have been realized if the acquisition had been completed on the date indicated. The supplemental pro forma financial information does not reflect synergies that might have been achieved, nor is it indicative of future operating results or financial position.
The pro forma financial information includes adjustments for: (i) amortization expense that would have been recognized related to the acquired intangible assets, (ii) depreciation expense that would have been recognized related to the acquired property, plant, and equipment, (iii) amortization of inventory fair value adjustment, (iv) acquisition related costs, such as third party transaction costs and restructuring costs, (v) stock-based compensation expense and (vi) the estimated income tax effect on the pro forma adjustments.
The supplemental pro forma financial information for the periods presented is as follows (in millions):
 Three Months Ended
September 28, 2024September 30, 2023
Net revenue$336.9 $386.6 
Net loss$(78.9)$(63.6)

12
LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 5. Cash, Cash Equivalents and Short-term Investments
The following table summarizes our cash, cash equivalents and short-term investments by category for the periods presented (in millions):
Amortized
Cost		 Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
September 28, 2024:
Cash$284.9 $— $— $284.9 
Cash equivalents:
Commercial paper7.5 — — 7.5 
Money market funds184.8 — — 184.8 
U.S. Treasury securities12.0 — — 12.0 
Total cash and cash equivalents$489.2 $— $— $489.2 
Short-term investments:
Certificates of deposit$0.8 $— $— $0.8 
Commercial paper11.5 — — 11.5 
Corporate debt securities234.1 0.9 (0.1)234.9 
U.S. Agency securities66.4 0.1 — 66.5 
U.S. Treasury securities113.3 — (0.1)113.2 
Total short-term investments$426.1 $1.0 $(0.2)$426.9 
June 29, 2024:
Cash$196.9 $— $— $196.9 
Cash equivalents:
Commercial paper15.9 — — 15.9 
Money market funds223.9 — — 223.9 
Total cash and cash equivalents$436.7 $— $— $436.7 
Short-term investments:
Certificates of deposit$0.8 $— $— $0.8 
Commercial paper12.6 — — 12.6 
Corporate debt securities244.5 — (0.6)243.9 
U.S. Agency securities81.2 — (0.3)80.9 
U.S. Treasury securities112.6 — (0.5)112.1 
Total short-term investments$451.7 $— $(1.4)$450.3 
We review our investment portfolio to identify and evaluate investments that have indicators of possible impairment. Factors considered in determining whether a loss is other-than-temporary include, but are not limited to, the length of time and extent a security’s fair value has been below its cost, the financial condition and near-term prospects of the investee, the credit quality of the security’s issuer, likelihood of recovery and our intent and ability to hold the security for a period sufficient to allow for any anticipated recovery in value. For the debt instruments we own, we also evaluate whether we have the intent to sell the security or whether it is more likely than not that we will be required to sell the security before recovery of its cost basis. We have not recorded our unrealized losses on our short-term investments into income because we do not intend to sell nor is it more likely than not that we will be required to sell these investments prior to recovery of their amortized cost basis.
We use the specific-identification method to determine any realized gains or losses from the sale of our short-term investments classified as available-for-sale. During the three months ended September 28, 2024 and September 30, 2023, we did not realize significant gains or losses on a gross level from the sale of our short-term investments classified as available-for-sale.
13
LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
During the three months ended September 28, 2024 and September 30, 2023, our other income, net was $8.7 million and $21.2 million, respectively, which includes interest and investment income on cash equivalents and short-term investments of $9.4 million and $21.7 million, respectively.
As of September 28, 2024 and June 29, 2024, we recorded interest receivables of $5.8 million and $5.8 million, respectively, in prepayments and other current assets within the condensed consolidated balance sheets. We did not recognize an allowance for credit losses against interest receivables in any of the periods presented, as there were no such losses.
The following table summarizes unrealized losses on our cash equivalents and short-term investments by category that have been in a continuous unrealized loss position for more than 12 months and less than 12 months as of the periods presented, respectively (in millions):
Continuous Loss Position for
 More Than 12 Months
Continuous Loss Position for
 Less Than 12 Months
Gross Unrealized Losses
Fair ValueUnrealized LossesFair ValueUnrealized Losses
September 28, 2024:
U.S. Agency securities$44.6 $— $4.0 $— $— 
Commercial paper— — 7.5 — — 
Corporate debt securities67.1 (0.1)18.0 — (0.1)
U.S. government bonds68.4 (0.1)22.5 — (0.1)
Total $180.1 $(0.2)$52.0 $— $(0.2)
June 29, 2024:
U.S. Agency securities$62.3 $(0.3)$12.6 $— $(0.3)
Commercial paper— — 28.6 — — 
Corporate debt securities133.7 (0.5)90.6 (0.2)(0.7)
U.S. government bonds72.3 (0.4)39.7 (0.1)(0.5)
Total$268.3 $(1.2)$171.5 $(0.3)$(1.5)
The following table classifies our short-term investments by remaining maturities (in millions): 
September 28, 2024June 29, 2024
Amortized CostFair ValueAmortized CostFair Value
Due within 1 year$346.1 $346.3 $405.5 $404.1 
Due in 1 year to 5 years80.0 80.6 46.2 46.2 
Total$426.1 $426.9 $451.7 $450.3 
All available-for-sale securities have been classified as current, based on management’s intent and ability to use the funds in current operations.
14
LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 6. Fair Value Measurements
We determine fair value based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value assumes that the transaction to sell the asset or transfer the liability occurs in the principal or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value:
Level 1:Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2:Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
Level 3:Inputs are unobservable inputs based on our assumptions.
The fair value of our Level 1 financial instruments, such as money market funds and U.S. Treasury securities, which are traded in active markets, is based on quoted market prices for identical instruments. The fair value of our Level 2 fixed income securities is obtained from an independent pricing service, which may use quoted market prices for identical or comparable instruments or model driven valuations using observable market data or inputs corroborated by observable market data. Our marketable securities are held by custodians who obtain investment prices from a third-party pricing provider that incorporates standard inputs in various asset price models. Our procedures include controls to ensure that appropriate fair values are recorded, including comparing the fair values obtained from our pricing service against fair values obtained from another independent source.
Financial assets measured at fair value on a recurring basis are summarized below (in millions): 
Level 1 Level 2 Level 3Total
September 28, 2024: (1)
Assets:
Cash equivalents:
Commercial paper$— $7.5 $— $7.5 
Money market funds184.8 — — 184.8 
U.S. Treasury securities12.0 — — 12.0 
Short-term investments:
Certificates of deposit— 0.8 — 0.8 
Commercial paper— 11.5 — 11.5 
Corporate debt securities— 234.9 — 234.9 
U.S. Agency securities— 66.5 — 66.5 
U.S. Treasury securities113.2 — — 113.2 
Total assets$310.0 $321.2 $— $631.2 
(1) Excludes $284.9 million in cash held in our bank accounts as of September 28, 2024.
15
LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Level 1Level 2Level 3Total
June 29, 2024 (1)
Assets:
Cash equivalents:
Commercial paper$— $15.9 $— $15.9 
Money market funds223.9 — — 223.9 
Short-term investments:
Certificates of deposit— 0.8 — 0.8 
Commercial paper— 12.6 — 12.6 
Corporate debt securities— 243.9 — 243.9 
U.S. Agency securities— 80.9 — 80.9 
U.S. Treasury securities112.1 — — 112.1 
Total assets$336.0 $354.1 $— $690.1 
(1) Excludes $196.9 million in cash held in our bank accounts as of June 29, 2024.
Financial Instruments Not Recorded at Fair Value on a Recurring Basis
We report our financial instruments at fair value with the exception of our convertible notes, refer to “Note 9. Debt”. The estimated fair value of the convertible notes was determined based on the trading price of the convertible notes as of the last day of trading for the period. We consider the fair value of the convertible notes to be a Level 2 measurement as they are not actively traded in markets.
The carrying amounts and estimated fair values of the convertible notes are as follows for the periods presented (in millions):
September 28, 2024June 29, 2024
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
2029 Notes$599.6 $706.2 $599.4 $588.8 
2028 Notes856.9 748.9 856.6 680.2 
2026 Notes1,047.4 1,034.6 1,047.2 948.3 
$2,503.9 $2,489.7 $2,503.2 $2,217.3 
Assets Measured at Fair Value on a Non-Recurring Basis
We periodically review our intangible and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its eventual disposition. If not recoverable, an impairment loss would be calculated based on the excess of the carrying amount over the fair value.
Management utilizes various valuation methods, including an income approach, a market approach and a cost approach, to estimate the fair value of intangibles and other long-lived assets. During the annual impairment testing performed in the fourth quarter of fiscal 2024, we concluded that there was no impairment of our intangible and other long-lived assets. 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 during the three months ended September 28, 2024.
Note 7. Balance Sheet Details
Allowance for Current Expected Credit Losses
We did not have any allowance for credit losses other than our allowance for uncollectible accounts receivable. As of September 28, 2024 and June 29, 2024, the allowance for credit losses on our trade receivables was $0.2 million and $0.2 million, respectively.
16
LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Inventories
The components of inventories were as follows (in millions):
September 28, 2024June 29, 2024
Raw materials and purchased parts$206.0 $196.9 
Work in process119.1 101.6 
Finished goods78.2 99.9 
Inventories
$403.3 $398.4 
In connection with the Cloud Light acquisition, we recorded $72.8 million of inventory as of the Cloud Light Closing Date. As of June 29, 2024, the entire $8.0 million of fair value step-up of inventory acquired from Cloud Light was amortized and recognized as cost of sales in our condensed consolidated statements of operations.
Property, Plant and Equipment, Net
The components of property, plant and equipment, net were as follows (in millions):
September 28, 2024June 29, 2024
Land$108.6 $75.2 
Buildings and improvements258.8 215.1 
Machinery and equipment778.9 772.1 
Computer equipment and software44.9 44.9 
Furniture and fixtures13.9 14.3 
Leasehold improvements44.8 47.5 
Construction in progress81.6 71.1 
1,331.5 1,240.2 
Less: Accumulated depreciation(693.1)(667.7)
Property, plant and equipment, net$638.4 $572.5 
In connection with the Cloud Light acquisition, we assumed $62.5 million of property, plant and equipment, net, as of the acquisition Cloud Light Closing Date.
Our construction in progress primarily includes machinery and equipment that we expect to place in service in the next 12 months.
In July 2024, we purchased the land and building of our wafer fabrication facility located in Sagamihara, Japan for a total transaction price of $42.2 million including $1.3 million of incremental direct costs for fees paid to third parties that were capitalized. We also recorded a $16.3 million increase in the carrying value of buildings purchased related to the termination of leases for the purchased building. The total carrying value of assets purchased was $58.5 million at the purchase date, of which $33.4 million was allocated to the land and $25.1 million to the building.
In August 2023, we purchased land and buildings that we previously leased in Caswell, United Kingdom for a total purchase price of $23.3 million. Additionally, we capitalized $1.8 million of incremental direct costs for fees paid to third parties. We also recorded a $0.3 million reduction in the carrying value of buildings purchased related to the termination of leases for the purchased buildings. The total carrying value of assets purchased is $24.8 million at the purchase date, of which $11.8 million was allocated to the land and $13.0 million to the buildings.
During the three months ended September 28, 2024 and September 30, 2023, we recorded depreciation expense of $27.0 million and $28.2 million, respectively.
17
LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Operating Lease Right-of-Use Assets
Operating lease right-of-use assets, net were as follows (in millions):
September 28, 2024June 29, 2024
Operating lease right-of-use assets$66.1 $112.3 
Less: accumulated amortization(30.4)(39.5)
Operating lease right-of-use assets, net$35.7 $72.8 
In connection with our integration efforts to consolidate our sites, we recorded restructuring charges for various sites and reduced our operating lease right-of-use assets by $5.3 million during the three months ended September 28, 2024.
In connection with the Cloud Light acquisition, we acquired $3.7 million of right-of-use assets related to leases of real estate properties used as our manufacturing and office premises. We accounted for these leases as operating leases and have the remaining lease term ranging from 1.5 to 2.6 years at the Cloud Light Closing Date.
In connection with the purchase of land and building in Sagamihara, Japan in July 2024, we terminated our leases for the related facilities and recorded a $16.3 million increase in the carrying value of building purchased, as a result of derecognizing $32.0 million of net operating lease right-of-use asset, $1.6 million of operating lease liabilities, current, and $14.1 million of operating lease liabilities, non-current.
In connection with the purchase of land and buildings in the United Kingdom in August 2023, we terminated our leases for the related facilities and recorded a $0.3 million of reduction in the carrying value of buildings purchased, as a result of derecognizing $4.8 million of net operating lease right-of-use asset, $2.4 million of operating lease liabilities, current, and $2.7 million of operating lease liabilities, non-current.
Other Current Liabilities
The components of other current liabilities were as follows (in millions):
September 28, 2024June 29, 2024
Restructuring accrual and related charges (1)
$6.3 $11.1 
Warranty reserve (2)
13.2 13.2 
Deferred revenue and customer deposits0.6 0.6 
Income tax payable (3)
11.9 13.2 
Other current liabilities 5.6 3.0 
Other current liabilities
$37.6 $41.1 
(1) Refer to “Note 11. Restructuring and Related Charges.”
(2) Refer to “Note 14. Commitments and Contingencies.”
(3) Refer to “Note 12. Income Taxes.”
Other Non-Current Liabilities
The components of other non-current liabilities were as follows (in millions):
September 28, 2024June 29, 2024
Asset retirement obligations$7.0 $7.5 
Pension and related accruals (1)
8.6 7.5 
Unrecognized tax benefit94.4 83.0 
Other non-current liabilities6.2 5.4 
Other non-current liabilities$116.2 $103.4 
18
LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
(1) We have defined benefit pension plans in Japan, Switzerland, and Thailand. Pension and related accrual of $8.6 million as of September 28, 2024 represents $9.5 million of non-current portion of benefit obligation, offset by $0.9 million of funding for the pension plan in Switzerland. Pension and related accrual of $7.5 million as of June 29, 2024 relates to $8.6 million of non-current portion of benefit obligation, offset by $1.2 million of funding for the pension plan in Switzerland. We typically re-evaluate the assumptions related to the fair value of our defined benefit obligations annually in the fiscal fourth quarter and make any updates as necessary.
Note 8. 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.
The following table presents goodwill by reportable segments as of September 28, 2024 and June 29, 2024 (in millions):
Cloud & NetworkingIndustrial TechTotal
Balances as of June 29, 2024$1,044.6 $11.2 $1,055.8 
Acquisition of Cloud Light (1)
5.1 — 5.1 
Balances as of September 28, 2024$1,049.7 $11.2 $1,060.9 
(1) During the three months ended September 28, 2024, 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. In the fourth quarter of fiscal 2024, we completed the annual impairment test of goodwill, which indicated there was no goodwill impairment. There were no indicators of goodwill impairment during the three months ended September 28, 2024.
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.
In-process research and development (“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 fiscal 2024, 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 three months ended September 28, 2024.
19
LUMENTUM HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
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 DateWeighted Average Amortization Period
(Years)
Acquired developed technologies$170.0 7.0
Customer relationships130.0 7.0
In-process research and development16.0 n/a
Order backlog14.0 1.0
Trade name and trademarks3.0 1.2
Total intangible assets$333.0 
Refer to “Note 4. Business Combinations” for the acquisitions of Cloud Light.
The following tables present details of all of our intangible assets as of the periods presented (in millions, except for weighted average remaining amortization period):
September 28, 2024Gross Carrying AmountsAccumulated AmortizationNet Carrying AmountsWeighted Average Remaining Amortization Period (Years)
Acquired developed technologies$818.2 $(496.4)$321.8 4.6
Customer relationships 419.8 (183.7)236.1 4.7
In-process research and development13.6 — 13.6 n/a
Order backlog14.0 (12.4)1.6 0.1
Trade name and trademarks3.0 (2.2)0.8 0.3
Total intangible assets$1,268.6 $(694.7)$573.9 
June 29, 2024Gross Carrying AmountsAccumulated AmortizationNet Carrying AmountsWeighted 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 development15.5 — 15.5 n/a
Order backlog14.0 (8.9)5.1 0.4
Trade name and trademarks3.0 (1.6)1.4 0.6
Total intangible assets $1,270.4 $(652.9)$