LUMENTUM HOLDINGS INC.

Red flags

• FY2026 net loss was $6.94 billion versus $25.9 million of net income in FY2025; diluted loss was $92.96 per share.
• Total debt was $1.64 billion at June 27, 2026, including $1.54 billion of convertible notes classified as current because holders met conversion conditions.
• Debt equitizations issued approximately 5.7 million common shares and caused approximately 0.6 million shares of incremental dilution; 13.6 million potential shares from convertible notes were excluded as anti-dilutive in FY2026.
• Huawei, historically Lumentum's largest networking customer in China, has been completely restricted since early 2024; the company has stopped all shipments and future development activity with Huawei.
• Two customers represented 30% and 11% of gross accounts receivable at June 28, 2025; two customers represented 13% and 11% at June 27, 2025, indicating meaningful collection concentration.
• The company relies on a limited number of suppliers for key components and a limited number of independent contract manufacturers; forecast errors can create shortages, excess inventory, write-downs and cancellation charges.