Standing in the light, it is still unable to exceed expectations! Lumentum (LITE.US) Q3 revenue surged by 90%, slightly below expectations, with stock price falling after hours.

On Wednesday morning, Beijing time, leading optical communications company Lumentum (LITE.US) announced its third-quarter performance ending March 28, 2026. The data shows that the company's Q3 revenue increased by 90% year-on-year to $808 million, slightly below market expectations of $810 million; adjusted earnings per share were $2.37, higher than market expectations of $2.27. The company, which provides optical and photonics products for cloud computing, networking, and industrial applications, also reported that its Q3 adjusted gross margin was 47.9%, higher than the market's expected 45%; adjusted operating profit was $260.7 million, higher than the market's expected $245.5 million. By business segment, Lumentum's third-quarter component business revenue was $533 million, a 77.3% year-on-year increase; system business revenue was $275 million, a 121.1% year-on-year increase. Looking ahead, Lumentum expects fourth-quarter revenue to be between $960 million and $1.01 billion, with a midpoint of $980 million, higher than market expectations of $936 million. The company expects fourth-quarter adjusted earnings per share to be between $2.85 and $3.05, with a midpoint of $2.95, comfortably exceeding market expectations of $2.75. Lumentum CEO Michael Hurlston said in a statement, "In the third quarter, Lumentum achieved outstanding results, with revenue growing by 90% year-on-year to a record $808 million. While our revenue growth has been a focus, what has been most impressive recently is the margin improvement. In the third quarter, gross margin increased by 540 basis points and operating margin increased by 700 basis points." Hurlston added, "The margin improvement is due to many factors, including disciplined operations, robust pricing strategies, and an optimized product mix. This quarter, the optimization of our product mix benefited from strong performance in laser chips, as well as from lesser-known parts of our product mix - 'scalable' components, including our pump lasers and narrow linewidth laser components. As key growth drivers such as Co-Packaged Optics (CPO) and optical switches gradually come into play, we expect profitability to further improve." Lumentum and its peer Coherent (COHR.US) have both benefited from a significant increase in capital spending by hyperscale cloud providers. The technology products developed and produced by these two optical communication companies enable interconnection communication between artificial intelligence computing chips. In March of this year, NVIDIA Corporation (NVDA.US) announced investments of $20 billion each in Lumentum and Coherent, as well as reaching agreements with both companies for multi-billion dollar product procurement intentions. Hurlston stated last month that demand for optical components from top U.S. technology companies continues to grow rapidly, with the company's orders close to being fully booked through 2028. After the financial report was released, Lumentum's stock fell more than 3% in after-hours trading. The stock has surged 170% so far this year and was added to the S&P 500 index in March. Coherent's stock fell 1.2% in after-hours trading.