Lumentum nearly doubled its sales in twelve months, and the factory economics improved with them.
Revenue rose 83.2% to $3.0 billion for the year ended June 27, 2026. Gross profit grew even faster, reaching $1.3 billion, while operating income swung from a $180.1 million loss to $524.8 million. Operating cash flow rose to $751.4 million from $126.3 million.
Then the annual income statement took a hard left. Net income moved from a $25.9 million profit to a $6.9 billion loss. Diluted earnings per share fell from $0.37 to negative $92.96. Lumentum does not provide, in the cited discussion, one quantified explanation for the full net loss, so the operating recovery and bottom-line result have to be read separately.
The strongest evidence is in gross margin, which rose to 41.7% from 28.0%. Management attributes that improvement to higher revenue from several product lines, then adds a more concrete factory-level explanation:
"Approximately 54% of the gross margin dollar increase was driven by lower manufacturing costs as a percentage of revenue, primarily due to higher internal factory utilization."
Lumentum, 2026 10-K, filed Aug. 17, 2026
In plain English, more volume did not merely add sales. It spread manufacturing costs across a larger base. The company also says the remaining roughly 22% of Components revenue growth came mainly from higher shipment volume in data transport products.
That makes the loss harder to use as a simple read on the operating business. Lumentum ended the year with $2.0 billion of cash, up from $520.7 million, and its other-income discussion says the increase was helped by $2.0 billion of proceeds from preferred-stock issuance, along with higher interest income and a Cloud Light escrow settlement. Cash improved, but not solely because the factory generated cash.
The capital bill rose too. Capital expenditures reached $451.3 million, up 95.4%, equal to 15.0% of revenue. Inventory rose 47.1% to $691.6 million, a slower pace than sales but still a material balance to carry into the next reporting period. The company does not state why inventory increased.
Costs were not standing still, either. R&D expense rose 17.3% to $356.5 million, including $19.9 million tied to new R&D programs. That spending came alongside the operating rebound rather than replacing it, but it also means the new revenue base is being supported by continued product investment.
The balance sheet has a financing wrinkle. Lumentum's diluted share count rose 7.2% to 74.6 million, while management says interest expense edged down because portions of its 2026, 2028, and 2029 notes were converted or equitized, partly offset by the 2032 notes issued in September 2025. The company has more cash and a much stronger operating margin, but the capital structure is part of the year's result too.
At the latest close, Lumentum was $925.91, after a 5.1% daily rise. Its market capitalization was $64.4 billion and its enterprise value $66.5 billion, figures that place a great deal of attention on whether the operating improvement can persist. The immediate tension is not hidden: the business produced $751.4 million of operating cash flow, while the reported net loss was several billion dollars larger in the other direction.
The $691.6 million inventory figure is the balance-sheet marker for subsequent reporting.
Source: Lumentum Holdings Inc. 2026 Form 10-K, filed Aug. 17, 2026.