SEC Filings

Lumentum's $100 Million Customer Receivable Comes With An Offsetting $100 Million Liability, Not Revenue

A September capacity-reservation deal added $100.0 million to both sides of Lumentum's balance sheet as its customer concentration climbed.

Lumentum, which makes lasers, optical modules and other photonic products for cloud and AI customers, booked a $100.0 million receivable from a September capacity-reservation deal alongside an equal contract liability, so none of it counts as revenue yet. The 10-Q, filed Tuesday, also shows two end customers made up 37% and 11% of quarterly sales.

One installment, two lines on the balance sheet

A customer agreed in September 2026 to pay Lumentum in two parts to reserve manufacturing capacity. The first part, $100.0 million, was owed at signing and is matched by a long-term liability.

That liability is why deferred revenue and customer deposits in non-current liabilities stood at $109.5 million on September 26, against $1.4 million at June 27, 2026. Accounts receivable, net, rose to $625.7 million from $520.3 million at June 27.

The second installment is not quantified in the filing.

Two customers, 48% of the quarter

Revenue reached $1,262.6 million in the quarter ended September 26, up 136.5% from $533.8 million a year earlier. Two end customers accounted for 37% and 11% of net revenue; in the year-earlier quarter the pair were 22% and 21%.

Net income was $360.3 million, or $3.54 per diluted share, with gross margin at 51.0% from 34.0%. Lumentum's earnings release on Monday guided second-quarter revenue to $1.575 billion to $1.625 billion.

Notes settled in cash, drawing down the cash pile

Cash fell to $1,272.2 million from $2,043.5 million at June 27. Financing activities used $804.4 million, including $493.3 million paid to settle convertible-note conversions and $306.9 million in taxes on net share settlement of restricted stock.

Holders have asked to convert $779.9 million of principal as of October 30, to be settled in cash. All the notes stay convertible through the second quarter of fiscal 2027, since the stock closed at least 130% above each conversion price for 20 of the last 30 trading days of the first quarter. The 2026 Notes mature December 15, 2026, with $4.2 million of principal outstanding.

On taxes, the deferred tax asset stands at $557.3 million. The company keeps valuation allowances on foreign tax credits and California research credits, a full allowance on Canada and a partial one on the U.K.

Marvell deal arrives with the filing

The 10-Q also covers the merger agreement signed November 1 with Marvell, under which each Lumentum share converts into 4.500 Marvell shares. Lumentum may owe Marvell a $2.9 billion termination fee in certain cases, and Marvell may owe $5.8 billion, or a $3.2 billion regulatory fee. Either side may terminate if the deal is not completed by November 1, 2027, a date extendable in certain circumstances.

Lumentum's market value was $62.0 billion as of Tuesday's report.