Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Lumentum Holdings Inc., profitability ratios
Based on: 10-K (reporting date: 2026-06-27), 10-K (reporting date: 2025-06-28), 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03).
The profitability profile demonstrates a period of significant volatility, characterized by a sharp decline in margins between 2021 and 2024, followed by a partial recovery and a subsequent collapse in net performance by 2026.
- Gross Profitability Trends
- Gross profit margins experienced a peak of 46.05% in 2022 before undergoing a substantial contraction, reaching a low of 18.50% in 2024. A recovery trend is evident in the final two years, with margins returning to 41.67% by 2026, suggesting an improvement in direct cost management or pricing power.
- Operating Efficiency
- Operating margins showed a more severe deterioration than gross margins, shifting from a positive 30.24% in 2021 to a deficit of -31.93% in 2024. While a recovery is observed by 2026, reaching 17.41%, the period between 2023 and 2025 indicates significant operational distress or heavy restructuring costs.
- Net Profitability and Returns
- Net profit margins, Return on Equity (ROE), and Return on Assets (ROA) exhibit highly volatile trajectories. After declining into negative territory by 2023 and hitting a nadir in 2024, there was a marginal recovery in 2025. However, the 2026 figures show an extreme divergence, with the net profit margin dropping to -230.10%, ROE to -149.34%, and ROA to -94.90%. This indicates the occurrence of substantial non-operating losses or extraordinary charges in the final period that heavily outweighed the recovery in operating performance.
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Return on Sales
Return on Investment
Gross Profit Margin
Lumentum Holdings Inc., gross profit margin calculation, comparison to benchmarks
| Jun 27, 2026 | Jun 28, 2025 | Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Gross profit | 1,255,900) | 459,900) | 251,500) | 569,000) | 788,600) | 783,100) | |
| Net revenue | 3,014,000) | 1,645,000) | 1,359,200) | 1,767,000) | 1,712,600) | 1,742,800) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 41.67% | 27.96% | 18.50% | 32.20% | 46.05% | 44.93% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Apple Inc. | — | 46.91% | 46.21% | 44.13% | 43.31% | 41.78% | |
| Arista Networks Inc. | — | 64.06% | 64.13% | 61.95% | 61.07% | 63.80% | |
| Cisco Systems Inc. | — | 64.94% | 64.73% | 62.73% | 62.55% | 64.02% | |
| Dell Technologies Inc. | 20.00% | 22.24% | 23.60% | 22.18% | 21.63% | 31.22% | |
| Super Micro Computer Inc. | — | 11.06% | 13.75% | 18.01% | 15.40% | 15.03% | |
Based on: 10-K (reporting date: 2026-06-27), 10-K (reporting date: 2025-06-28), 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03).
1 2026 Calculation
Gross profit margin = 100 × Gross profit ÷ Net revenue
= 100 × 1,255,900 ÷ 3,014,000 = 41.67%
2 Click competitor name to see calculations.
The analysis of gross profitability reveals a volatile cycle characterized by a period of stability, a sharp contraction, and a subsequent robust recovery.
- Gross Profit Margin Volatility
- The gross profit margin reached a peak of 46.05% in 2022 before entering a steep downward trajectory. This decline culminated in a trough of 18.50% in 2024, representing a significant erosion of profitability. A recovery phase followed, with the margin improving to 27.96% in 2025 and rebounding to 41.67% by 2026, nearly returning to the levels observed at the start of the period.
- Net Revenue and Profitability Correlation
- Net revenue remained relatively consistent between 2021 and 2023, fluctuating between US$ 1.71 billion and US$ 1.76 billion. However, a notable contraction occurred in 2024, with revenue falling to US$ 1.35 billion. This decline in top-line revenue coincided with the lowest recorded gross profit of US$ 251.5 million, indicating a period of heightened operational pressure or adverse market conditions.
- Growth and Margin Restoration
- A strong expansion is evident in the final two years of the analysis. Net revenue surged to US$ 3.01 billion by 2026, the highest value in the observed timeframe. This growth was accompanied by a substantial increase in gross profit to US$ 1.25 billion. The simultaneous rise in both revenue and margin suggests an improvement in cost efficiencies or a shift toward higher-value product mixes, effectively restoring the company's profitability profile.
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Operating Profit Margin
Lumentum Holdings Inc., operating profit margin calculation, comparison to benchmarks
| Jun 27, 2026 | Jun 28, 2025 | Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Income (loss) from operations | 524,800) | (180,100) | (434,000) | (115,700) | 303,300) | 527,000) | |
| Net revenue | 3,014,000) | 1,645,000) | 1,359,200) | 1,767,000) | 1,712,600) | 1,742,800) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 17.41% | -10.95% | -31.93% | -6.55% | 17.71% | 30.24% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Apple Inc. | — | 31.97% | 31.51% | 29.82% | 30.29% | 29.78% | |
| Arista Networks Inc. | — | 42.82% | 42.05% | 38.52% | 34.86% | 31.37% | |
| Cisco Systems Inc. | — | 20.76% | 22.64% | 26.37% | 27.09% | 25.76% | |
| Dell Technologies Inc. | 7.18% | 6.53% | 5.89% | 5.64% | 4.60% | 5.46% | |
| Super Micro Computer Inc. | — | 5.70% | 8.08% | 10.68% | 6.45% | 3.48% | |
| Operating Profit Margin, Sector | |||||||
| Technology Hardware & Equipment | — | 25.95% | 25.93% | 24.76% | 25.11% | 24.80% | |
| Operating Profit Margin, Industry | |||||||
| Information Technology | — | 30.76% | 26.46% | 24.34% | 26.23% | 26.58% | |
Based on: 10-K (reporting date: 2026-06-27), 10-K (reporting date: 2025-06-28), 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03).
1 2026 Calculation
Operating profit margin = 100 × Income (loss) from operations ÷ Net revenue
= 100 × 524,800 ÷ 3,014,000 = 17.41%
2 Click competitor name to see calculations.
The financial performance from 2021 to 2026 is characterized by a significant period of operational decline followed by a robust recovery. The operating profit margin experienced a severe contraction, moving from a high of 30.24% in 2021 to a trough of -31.93% in 2024, before returning to positive territory by 2026.
- Revenue Trajectory
- Net revenue remained relatively stable between 2021 and 2023, hovering around the 1.7 billion range. A notable contraction occurred in 2024, where revenue dropped to 1.36 billion. However, a sharp upward trajectory followed, culminating in a substantial increase to 3.01 billion by 2026, indicating a significant expansion in market reach or product demand.
- Operating Income Volatility
- Operating income exhibited high volatility, transitioning from a profit of 527 million in 2021 to consecutive losses between 2023 and 2025. The most acute loss was recorded in 2024 at 434 million. By 2026, the operating income recovered to 524.8 million, nearly returning to the levels observed at the start of the analyzed period.
- Operating Profit Margin Analysis
- The operating profit margin trend reveals a V-shaped recovery. The decline from 30.24% in 2021 to 17.71% in 2022, and subsequently into negative margins in 2023 and 2024, suggests a period of intense operational pressure or structural realignment. The subsequent improvement to -10.95% in 2025 and a return to 17.41% in 2026 demonstrates a successful restoration of operational efficiency and profitability.
The correlation between the surge in revenue and the return to a positive operating margin in 2026 suggests that the organization has achieved economies of scale or shifted toward a more profitable revenue mix, effectively reversing the downward trend observed during the 2023-2024 period.
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Net Profit Margin
Lumentum Holdings Inc., net profit margin calculation, comparison to benchmarks
| Jun 27, 2026 | Jun 28, 2025 | Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income (loss) | (6,935,100) | 25,900) | (546,500) | (131,600) | 198,900) | 397,300) | |
| Net revenue | 3,014,000) | 1,645,000) | 1,359,200) | 1,767,000) | 1,712,600) | 1,742,800) | |
| Profitability Ratio | |||||||
| Net profit margin1 | -230.10% | 1.57% | -40.21% | -7.45% | 11.61% | 22.80% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Apple Inc. | — | 26.92% | 23.97% | 25.31% | 25.31% | 25.88% | |
| Arista Networks Inc. | — | 38.99% | 40.73% | 35.62% | 30.87% | 28.52% | |
| Cisco Systems Inc. | — | 17.97% | 19.18% | 22.13% | 22.91% | 21.26% | |
| Dell Technologies Inc. | 5.23% | 4.81% | 3.63% | 2.39% | 5.50% | 3.45% | |
| Super Micro Computer Inc. | — | 4.77% | 7.69% | 8.98% | 5.49% | 3.14% | |
| Net Profit Margin, Sector | |||||||
| Technology Hardware & Equipment | — | 21.86% | 19.89% | 20.57% | 21.31% | 21.21% | |
| Net Profit Margin, Industry | |||||||
| Information Technology | — | 25.66% | 20.48% | 20.24% | 22.27% | 23.48% | |
Based on: 10-K (reporting date: 2026-06-27), 10-K (reporting date: 2025-06-28), 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03).
1 2026 Calculation
Net profit margin = 100 × Net income (loss) ÷ Net revenue
= 100 × -6,935,100 ÷ 3,014,000 = -230.10%
2 Click competitor name to see calculations.
The financial performance exhibits extreme volatility in profitability, characterized by a progression from substantial net margins to severe losses, interrupted by a brief period of marginal recovery.
- Profitability Trajectory
- A sharp downward trend in net profit margin is evident between 2021 and 2024. The margin decreased from a peak of 22.80% in 2021 to -40.21% by 2024. This decline occurred despite net revenue remaining relatively stable between 2021 and 2023, indicating that expenditures grew at a rate significantly exceeding revenue generation during this period.
- Revenue and Margin Correlation
- A contraction in net revenue to 1.36 billion in 2024 coincided with a deepening net loss of 546.5 million. While 2025 showed a brief return to profitability with a net profit margin of 1.57% and revenue increasing to 1.65 billion, the recovery was nominal compared to historical peaks.
- Extreme Margin Divergence
- The period ending June 2026 is marked by a severe divergence between top-line growth and bottom-line results. Although net revenue grew substantially to 3.01 billion, net income collapsed to a loss of approximately 6.94 billion. This resulted in a net profit margin of -230.10%, suggesting the impact of massive extraordinary charges or non-operating losses that far outweighed the operational scale of the business.
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Return on Equity (ROE)
Lumentum Holdings Inc., ROE calculation, comparison to benchmarks
| Jun 27, 2026 | Jun 28, 2025 | Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income (loss) | (6,935,100) | 25,900) | (546,500) | (131,600) | 198,900) | 397,300) | |
| Stockholders’ equity | 4,643,900) | 1,134,700) | 957,300) | 1,355,800) | 1,875,000) | 1,972,800) | |
| Profitability Ratio | |||||||
| ROE1 | -149.34% | 2.28% | -57.09% | -9.71% | 10.61% | 20.14% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Apple Inc. | — | 151.91% | 164.59% | 156.08% | 196.96% | 150.07% | |
| Arista Networks Inc. | — | 28.39% | 28.54% | 28.91% | 27.68% | 21.13% | |
| Cisco Systems Inc. | — | 21.73% | 22.70% | 28.44% | 29.70% | 25.66% | |
| Dell Technologies Inc. | — | — | — | — | — | 131.10% | |
| Super Micro Computer Inc. | — | 16.64% | 21.28% | 32.45% | 20.00% | 10.20% | |
| ROE, Sector | |||||||
| Technology Hardware & Equipment | — | 94.58% | 95.15% | 100.63% | 122.76% | 96.47% | |
| ROE, Industry | |||||||
| Information Technology | — | 34.38% | 28.82% | 31.26% | 38.03% | 41.64% | |
Based on: 10-K (reporting date: 2026-06-27), 10-K (reporting date: 2025-06-28), 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03).
1 2026 Calculation
ROE = 100 × Net income (loss) ÷ Stockholders’ equity
= 100 × -6,935,100 ÷ 4,643,900 = -149.34%
2 Click competitor name to see calculations.
The analysis of return on equity (ROE) reveals a period of extreme volatility and significant financial deterioration between July 2021 and June 2026. The trajectory is characterized by an initial decline, a period of deep negative returns, a marginal recovery, and a final catastrophic collapse in profitability relative to equity.
- ROE Performance Trends
- A precipitous decline in ROE is observed, falling from a peak of 20.14% in 2021 to a critical low of -149.34% by 2026. While a brief recovery to 2.28% occurred in 2025, it was insufficient to offset the subsequent downturn.
- Net Income Influence
- The volatility in ROE is primarily driven by severe fluctuations in net income. Profits diminished rapidly from US$ 397.3 million in 2021 to substantial losses of US$ 546.5 million by 2024. The final period shows an anomalous loss of approximately US$ 6.94 billion, which serves as the primary catalyst for the extreme negative ROE.
- Stockholders' Equity Dynamics
- Equity levels experienced a steady contraction from 2021 to 2024, decreasing from US$ 1.97 billion to US$ 957.3 million. However, a sharp increase in equity to US$ 4.64 billion in 2026 suggests a significant capital injection or asset revaluation; despite this increase in the equity base, the ROE plummeted further due to the scale of the concurrent net loss.
The overall trajectory indicates a severe collapse in the company's ability to generate returns for its shareholders, transitioning from a healthy positive return to an unsustainable negative state by the end of the observed period.
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Return on Assets (ROA)
Lumentum Holdings Inc., ROA calculation, comparison to benchmarks
| Jun 27, 2026 | Jun 28, 2025 | Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income (loss) | (6,935,100) | 25,900) | (546,500) | (131,600) | 198,900) | 397,300) | |
| Total assets | 7,307,500) | 4,218,700) | 3,931,900) | 4,632,100) | 4,162,200) | 3,551,600) | |
| Profitability Ratio | |||||||
| ROA1 | -94.90% | 0.61% | -13.90% | -2.84% | 4.78% | 11.19% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Apple Inc. | — | 31.18% | 25.68% | 27.51% | 28.29% | 26.97% | |
| Arista Networks Inc. | — | 18.05% | 20.31% | 20.98% | 19.96% | 14.66% | |
| Cisco Systems Inc. | — | 8.32% | 8.29% | 12.38% | 12.57% | 10.86% | |
| Dell Technologies Inc. | 5.86% | 5.76% | 3.91% | 2.73% | 6.00% | 2.63% | |
| Super Micro Computer Inc. | — | 7.48% | 11.73% | 17.42% | 8.90% | 4.99% | |
| ROA, Sector | |||||||
| Technology Hardware & Equipment | — | 21.93% | 18.48% | 20.39% | 21.50% | 18.83% | |
| ROA, Industry | |||||||
| Information Technology | — | 15.31% | 11.80% | 12.34% | 14.33% | 14.52% | |
Based on: 10-K (reporting date: 2026-06-27), 10-K (reporting date: 2025-06-28), 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03).
1 2026 Calculation
ROA = 100 × Net income (loss) ÷ Total assets
= 100 × -6,935,100 ÷ 7,307,500 = -94.90%
2 Click competitor name to see calculations.
The financial performance over the analyzed period indicates a severe deterioration in profitability and asset efficiency. After a period of positive returns, the organization transitioned into a cycle of volatility and substantial losses, culminating in a significant collapse of the return on assets in the final period.
- Net Income Trajectory
- A sharp downward trend in net income is observed, starting from a peak of US$ 397.3 million in July 2021. Profits declined in July 2022 and shifted to a net loss by July 2023. While a marginal recovery to a positive US$ 25.9 million was recorded in June 2025, this was followed by a catastrophic loss of US$ 6.935 billion in June 2026, indicating extreme financial instability in the final year.
- Asset Base Evolution
- Total assets exhibited moderate growth from July 2021 to July 2023, rising from US$ 3.55 billion to US$ 4.63 billion. A temporary contraction occurred in June 2024, followed by a steady increase to US$ 4.22 billion in June 2025. Notably, assets spiked to US$ 7.31 billion by June 2026, suggesting a significant expansion of the balance sheet that did not translate into operational gains.
- Return on Assets (ROA) Analysis
- The ROA reflects a critical decline in the ability to generate earnings from the asset base. The ratio dropped from a healthy 11.19% in 2021 to 4.78% in 2022, crossing into negative territory in 2023 (-2.84%) and deepening to -13.90% in 2024. Despite a brief return to a positive 0.61% in 2025, the ROA plummeted to -94.90% in June 2026. This final figure indicates that the massive increase in total assets coincided with a profound net loss, resulting in an almost total erosion of asset productivity.
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