Analysis of Reportable Segments
Lumentum Holdings Inc. operates in 2 segments: Cloud & Networking and Industrial Tech.
Segment Profit Margin
Lumentum Holdings Inc., profit margin by reportable segment
| Jun 28, 2025 | Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | |
|---|---|---|---|---|---|---|
| Cloud & Networking | 18.75% | 11.48% | 23.68% | 26.46% | — | — |
| Industrial Tech | 5.17% | 9.15% | 34.35% | 53.06% | — | — |
Based on: 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), 10-K (reporting date: 2020-06-27).
Segment profit margins exhibited distinct trends over the observed period. The Cloud & Networking segment experienced volatility, while the Industrial Tech segment demonstrated a consistent decline.
- Cloud & Networking
- The Cloud & Networking segment’s profit margin was not reported for the fiscal years ending June 27, 2020 and July 3, 2021. A margin of 26.46% was recorded for the fiscal year ending July 2, 2022, followed by a decrease to 23.68% in the fiscal year ending July 1, 2023. A significant decline to 11.48% occurred in the fiscal year ending June 29, 2024. A partial recovery to 18.75% was observed for the fiscal year ending June 28, 2025. This segment’s margin demonstrates considerable fluctuation throughout the period.
- Industrial Tech
- The Industrial Tech segment’s profit margin began at 53.06% in the fiscal year ending July 2, 2022. This margin decreased to 34.35% in the fiscal year ending July 1, 2023, and continued to decline to 9.15% in the fiscal year ending June 29, 2024. The decline persisted, with a margin of 5.17% reported for the fiscal year ending June 28, 2025. A consistent downward trend is evident in this segment’s profitability.
- Comparative Analysis
- In the fiscal year ending July 2, 2022, the Industrial Tech segment exhibited a substantially higher profit margin than the Cloud & Networking segment. However, both segments experienced margin compression in subsequent fiscal years, though at differing rates. By the fiscal year ending June 28, 2025, the Cloud & Networking segment’s margin, while volatile, surpassed that of the Industrial Tech segment.
The contrasting trends suggest differing market dynamics or internal factors impacting each segment’s profitability. The substantial decline in the Industrial Tech segment warrants further investigation.
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Segment Profit Margin: Cloud & Networking
Lumentum Holdings Inc.; Cloud & Networking; segment profit margin calculation
| Jun 28, 2025 | Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Segment profit | 264,500) | 124,500) | 313,200) | 266,900) | —) | —) |
| Net revenue | 1,410,800) | 1,084,900) | 1,322,500) | 1,008,700) | —) | —) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 18.75% | 11.48% | 23.68% | 26.46% | — | — |
Based on: 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), 10-K (reporting date: 2020-06-27).
1 2025 Calculation
Segment profit margin = 100 × Segment profit ÷ Net revenue
= 100 × 264,500 ÷ 1,410,800 = 18.75%
The Cloud & Networking segment experienced fluctuating profitability between 2022 and 2025. Segment profit and net revenue both increased from 2022 to 2023, but segment profit declined significantly in 2024 before partially recovering in 2025. This resulted in corresponding changes to the segment profit margin.
- Segment Profit
- Segment profit was reported as $266.9 million in 2022, increasing to $313.2 million in 2023. A substantial decrease to $124.5 million was observed in 2024, followed by a recovery to $264.5 million in 2025. This indicates volatility in the segment’s earnings capacity.
- Net Revenue
- Net revenue for the Cloud & Networking segment grew from $1,008.7 million in 2022 to $1,322.5 million in 2023. It then decreased to $1,084.9 million in 2024, before increasing again to $1,410.8 million in 2025. Revenue trends suggest a cyclical pattern or sensitivity to external market conditions.
- Segment Profit Margin
- The segment profit margin was 26.46% in 2022, decreasing to 23.68% in 2023. A significant decline to 11.48% occurred in 2024, reflecting the disproportionate decrease in segment profit relative to net revenue. The margin partially recovered to 18.75% in 2025, though it remains below the levels seen in 2022 and 2023. This suggests challenges in maintaining profitability despite revenue fluctuations.
The observed trends indicate that while the Cloud & Networking segment demonstrates revenue growth potential, its profitability is subject to considerable variation. The significant drop in segment profit margin in 2024 warrants further investigation to understand the underlying drivers, such as cost increases or pricing pressures.
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Segment Profit Margin: Industrial Tech
Lumentum Holdings Inc.; Industrial Tech; segment profit margin calculation
| Jun 28, 2025 | Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Segment profit | 12,100) | 25,100) | 152,700) | 373,500) | —) | —) |
| Net revenue | 234,200) | 274,300) | 444,500) | 703,900) | —) | —) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 5.17% | 9.15% | 34.35% | 53.06% | — | — |
Based on: 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), 10-K (reporting date: 2020-06-27).
1 2025 Calculation
Segment profit margin = 100 × Segment profit ÷ Net revenue
= 100 × 12,100 ÷ 234,200 = 5.17%
The Industrial Tech segment experienced a significant decline in profitability between 2022 and 2025. Segment profit decreased substantially over this period, coinciding with a reduction in net revenue. The segment profit margin reflects this deterioration, exhibiting a marked downward trend.
- Segment Profit
- Segment profit stood at US$373.5 million in 2022. This figure decreased to US$152.7 million in 2023, followed by further reductions to US$25.1 million in 2024 and US$12.1 million in 2025. This represents a substantial contraction in profitability over the four-year period.
- Net Revenue
- Net revenue for the Industrial Tech segment was US$703.9 million in 2022. Revenue decreased to US$444.5 million in 2023, and continued to decline to US$274.3 million in 2024 and US$234.2 million in 2025. The consistent decrease in revenue likely contributed to the decline in segment profit.
- Segment Profit Margin
- The segment profit margin began at 53.06% in 2022, indicating strong profitability. In 2023, the margin decreased to 34.35%. This downward trend accelerated in subsequent years, with the margin falling to 9.15% in 2024 and further to 5.17% in 2025. The substantial reduction in margin suggests increasing cost pressures or decreasing pricing power within the segment.
The consistent decline across all three metrics suggests a weakening performance within the Industrial Tech segment. The decreasing profit margin, in particular, warrants further investigation to determine the underlying causes and potential mitigation strategies.
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Net revenue
Lumentum Holdings Inc., net revenue by reportable segment
US$ in thousands
| Jun 28, 2025 | Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | |
|---|---|---|---|---|---|---|
| Cloud & Networking | 1,410,800) | 1,084,900) | 1,322,500) | 1,008,700) | —) | —) |
| Industrial Tech | 234,200) | 274,300) | 444,500) | 703,900) | —) | —) |
| Total | 1,645,000) | 1,359,200) | 1,767,000) | 1,712,600) | —) | —) |
Based on: 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), 10-K (reporting date: 2020-06-27).
The reporting segments demonstrate varying performance over the observed period. Total net revenue initially increased before experiencing a decline and subsequent recovery. A more detailed examination of individual segment contributions reveals distinct trends.
- Cloud & Networking
- Net revenue from the Cloud & Networking segment increased from US$1,008.7 million in 2022 to US$1,322.5 million in 2023, representing a substantial year-over-year growth. However, this was followed by a decrease to US$1,084.9 million in 2024. A subsequent increase to US$1,410.8 million is projected for 2025, exceeding the 2023 peak. This segment exhibits volatility but demonstrates an overall upward trajectory when considering the beginning and end points of the period.
- Industrial Tech
- The Industrial Tech segment experienced a consistent decline in net revenue throughout the period. Starting at US$703.9 million in 2022, revenue decreased to US$444.5 million in 2023, then further to US$274.3 million in 2024. This downward trend is projected to continue, with revenue reaching US$234.2 million in 2025. The segment’s contribution to total revenue has diminished significantly.
- Total Net Revenue
- Total net revenue increased from US$1,712.6 million in 2022 to US$1,767.0 million in 2023. A decrease was then observed in 2024, with total revenue falling to US$1,359.2 million. The projection for 2025 indicates a recovery to US$1,645.0 million, though it remains below the 2023 level. The overall trend suggests cyclicality, influenced heavily by the performance of the Cloud & Networking segment.
The contrasting performance of the two segments highlights a shift in the company’s revenue composition. While the Cloud & Networking segment demonstrates growth potential, the Industrial Tech segment continues to contract. The projected revenue for 2025 suggests that the Cloud & Networking segment will become an increasingly dominant contributor to overall revenue.
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Segment profit
Lumentum Holdings Inc., segment profit by reportable segment
US$ in thousands
| Jun 28, 2025 | Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | Jun 27, 2020 | |
|---|---|---|---|---|---|---|
| Cloud & Networking | 264,500) | 124,500) | 313,200) | 266,900) | —) | —) |
| Industrial Tech | 12,100) | 25,100) | 152,700) | 373,500) | —) | —) |
| Total | 276,600) | 149,600) | 465,900) | 640,400) | —) | —) |
Based on: 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), 10-K (reporting date: 2020-06-27).
Segment profit exhibited significant fluctuations across the observed period. The Cloud & Networking segment demonstrated initial growth followed by a substantial decline, while the Industrial Tech segment experienced a more pronounced and consistent downward trend. Total segment profit mirrored these shifts, resulting in overall volatility.
- Cloud & Networking Segment
- The Cloud & Networking segment reported a profit of US$266.9 million in 2022, increasing to US$313.2 million in 2023. However, a considerable decrease was observed in 2024, with profit falling to US$124.5 million. A partial recovery is indicated in 2025, with profit reaching US$264.5 million. This segment’s performance suggests potential cyclicality or sensitivity to specific market conditions.
- Industrial Tech Segment
- The Industrial Tech segment began with a profit of US$373.5 million in 2022. A marked decline occurred in 2023, with profit decreasing to US$152.7 million. This downward trend continued in subsequent years, with profit falling to US$25.1 million in 2024 and further to US$12.1 million in 2025. The consistent reduction in profit within this segment warrants further investigation into potential underlying causes, such as changing market demand or increased competition.
- Total Segment Profit
- Total segment profit peaked at US$640.4 million in 2022. A decline was then observed in 2023, with profit decreasing to US$465.9 million. This downward trend accelerated in 2024, resulting in a profit of US$149.6 million. A modest increase is projected for 2025, with total segment profit reaching US$276.6 million. The overall trend indicates a significant contraction in profitability, driven primarily by the performance of the Industrial Tech segment.
- Comparative Segment Performance
- In 2022, the Industrial Tech segment contributed a larger portion of total segment profit than the Cloud & Networking segment. However, the subsequent declines in the Industrial Tech segment’s profit resulted in the Cloud & Networking segment becoming the primary driver of overall profitability in 2023 and 2025. The relative contributions of each segment to total profit have therefore shifted considerably over the period.
The observed fluctuations in segment profit suggest a dynamic business environment and potential challenges in maintaining consistent profitability. The contrasting trends between the two segments highlight the importance of diversified revenue streams and the need for targeted strategies to address segment-specific issues.
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