Lumentum Holdings Inc Q4 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: David Vogt - UBS Investment Bank, Research Division - Analyst : And just two for me. One, Alan, going back to the inventory question, I guess, can you kind of help us understand, you made a comment that you think you're undershipping to industry demand, where that demand might be today? And how you see that demand sort of progressing as we move through this sort of more challenging period of time in '23 into '24? That kind of colors your view about recovering back to growth in calendar '24. And then maybe a longer-term question, I'll just give you both at the same time. When you think about mix of the business today, obviously, Consumer and Industrial is a lot smaller than it was last year. And presumably, that's a relatively strong gross margin business. How should we think about the operating leverage as growth recovers in Telecom and Datacom in calendar '24 from a margin perspective? Obviously, it's unlikely that REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 17, 2023 / 12:30PM, LITE.OQ - Q4 2023 Lumentum Holdings Inc Earnings Call you're going to get back to the high 40s gross margin, but I want to get a better sense for maybe gross margin trajectory as we move through the balance of this -- the next 4 quarters into maybe fiscal '25.

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : I guess from -- first one, if I can just ask you to delve a bit more into the AI-related demand that you're seeing? How much of that are you seeing in terms of interest on the VCSEL side versus EML? And when you think about also the customer set there, how much of the engagement is hyperscalers versus other newer sort of companies coming into the ecosystem? Any thoughts in terms of what you expect that demand to look like in a couple of years would be useful. And I have a follow-up. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 17, 2023 / 12:30PM, LITE.OQ - Q4 2023 Lumentum Holdings Inc Earnings Call

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Got it. Got it. And for my follow-up, just rotating back to the results and the guide for the fiscal first quarter. I think with 3D sensing in the past, you've obviously had a certain seasonality to the business through a year. Any thoughts of how you're thinking about seasonality this year? Should investors expect, sort of as you get to beyond 1Q, to see sort of sustained sequential growth in the business? Or given some of your comments about the sort of calendar year being inventory digestion impacted, it's really more of a step-up into the second half of the fiscal year? And I think what I'm trying to get to is we all understand the earnings power of the business at this run rate is depressed because of the lower demand or the inventory digestion. But in terms of revenue increasing, your OpEx savings coming through, what do you see as the normalized run rate for the business where you want to exit the year?