Lumentum's Q3 2025 Earnings: Unpacking Contradictions in Telecom Performance, Capacity, and Tariff Strategies

Telecom performance and demand, capacity expansion and supply chain, telecom market visibility and growth expectations, tariff headwind and manufacturing strategy, telecom business performance and recovery are the key contradictions discussed in Lumentum's latest 2025Q3 earnings call.



Record EML Chip Shipments and Cloud Demand:
- Lumentum shipped a record number of EML chips in Q3, marking a more than doubling of this business by the end of calendar 2025 compared to June 2024.
- The growth was driven by robust demand from hyperscale cloud customers and the scalability of Lumentum's optical components across the ecosystem.

Telecom and Data Center Interconnect Growth:
- Lumentum's telecom business experienced a significant increase in pump lasers and line subsystems, driven by cloud infrastructure demand.
- The growth was attributed to AI-driven data center requirements and the strong demand for long-haul transmission solutions.

Cloud Transceiver Revenue and Production Ramp:
- Cloud transceiver revenues were expected to grow over 50% sequentially in Q4, driven by three cloud transceiver customers and higher production capacity.
- This growth was fueled by new customer programs and increased capacity at the Thailand manufacturing campus.

Segment Performance and Profitability:
- The Cloud & Networking segment revenue grew 8% sequentially and 16% year-on-year, with segment profit at 20%.
- This performance was attributed to improved manufacturing utilization, favorable product mix, and increased demand from hyperscale cloud customers.