Lumentum Holdings (LITE) Financial History

Pursuant to the terms of our convertible notes, if the convertible notes are converted by holders, we are required to satisfy our conversion obligation with respect to the convertible notes by delivering cash equal to…

•general market conditions in the semiconductor industry;

•changes in global economic, market and political conditions and other external factors, including those resulting from trade tensions, rising inflation, and fluctuations in foreign currency exchange and interest rates;

Evolving laws and regulations relating to the foregoing matters add to the complexity of our compliance obligations and increase our compliance costs, and it is possible that our practices may be deemed not to comply…

New technology trends, such as AI, require us to keep pace with evolving regulations and industry standards.

Further, the United Kingdom has implemented legislation similar to the GDPR, which provides for penalties, similar to the GDPR.

We are also subject to laws and regulations relating to our collection, use, protection and other processing of personal data of our employees, customers and others.

There has been in recent years a focus on corporate social and environmental (“ESG”) responsibility in our industry as well as generally in the United States and globally, especially with respect to large public compa…

•make it more difficult for us to satisfy our debt obligations under the convertible notes or our Credit Agreement;

Our business may not generate cash flow from operations in the future sufficient to service our indebtedness and make necessary capital expenditures.

Servicing our existing and future indebtedness, including the 2026 Notes, 2028 Notes, 2029 Notes and 2032 Notes (collectively referred to as the “convertible notes”) and any revolving loans under our Credit Agreement,…

A breach or failure of our information technology systems, or those of our third-party service providers, could result in the unauthorized access to, or misappropriation of, our intellectual property, trade secrets, o…

If we have insufficient proprietary rights or if we fail to protect our rights, our business could be harmed.

Like other companies, we are subject to ongoing attempts by malicious actors, including through hacking, malware, ransomware, denial-of-service attacks, social engineering, exploitation of internet-connected devices,…

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including supporting the development and introduction of new products, addre…

On July 4, 2025, H.R.1, the One Big Beautiful Bill Act (“OBBBA”), was signed into law which contains a broad range of provisions affecting businesses including permanent extension of certain expiring provisions of the…

The Organization for Economic Cooperation and Development (the “OECD”) has proposed changes to existing tax laws, including a proposed global minimum tax of 15%, also known as Pillar Two.

•temporary loss of productivity or operational efficiency; and

In addition, any businesses we acquire may not perform as well as we expect.

We have in the past and expect to continue to seek to expand and diversify our operations with acquisitions of complementary technologies, products, manufacturing facilities, assets and businesses and other strategic…

Our manufacturing operations and those of our contract manufacturers may be affected by natural disasters such as earthquakes, floods, typhoons, tsunamis, fires and widespread health crises, changes in legal requireme…

If we are unable to manufacture certain products in our manufacturing facilities or if we or our contract manufacturers and suppliers are unable or fail to meet our production requirements, our business may be adverse…

•political developments, geopolitical unrest or other conflicts or wars in foreign nations, and the potential impact such developments or further actions could have on our customers in the markets in which we operate;…

•the imposition of export control measures on customers in China may cause those customers to seek domestic alternatives to our products, including developing alternatives internally, and our customers demand for our…

The markets in which we operate are dynamic and complex, and our success depends on our ability to deliver both our current product offerings and new products and technologies on time and at acceptable prices to our c…

•factors beyond our control such as natural disasters, climate change, acts of war or terrorism, and pandemics and other public health emergencies;

We cannot be certain what additional actions the U.S.

Under the current regulatory policy and rules, our business with Huawei is now completely restricted.

In August 2020, the Bureau of Industry and Security of the U.S.

Adverse regulatory activity, such as export controls, economic sanctions and the imposition of heightened trade tariffs both globally and between the United States and China specifically carry the risk of negatively i…

Outside of the U.S., geopolitical escalations and retaliatory measures from various countries also have in the past, and may in the future, adversely impact business operations.

Any of the effects described in this risk factor could have an adverse effect on our business, results of operations, or financial condition.

Our business and operating results depend significantly on general market and economic conditions.

•actions taken by suppliers, customers and authorized or unauthorized resellers or distributors that adversely affect our reputation or violate import or export regulations;

•our strategic transactions and implementation strategy for our acquisitions;

•higher tariffs and other trade restrictions between the U.S.

•our ability to sell to a significant customer;

•our gross margins and operating margins may vary over time;

•unfavorable economic and market conditions, including trade restrictions, export control laws and customs regulations, and tariffs;

•changes in recommendations by securities analysts;

•changes in global political tensions that may affect business with our customers, such as trade wars caused by or resulting in the imposition of heightened or scheduled proposed tariffs or the possibility of future t…

•general economic and market conditions and other external factors;

We also face risks that third parties may assert trademark infringement claims against us in one or more jurisdictions throughout the world related to our brands and/or other trademarks and our exposure to these risks…

Lawsuits and allegations of patent infringement and violation of other intellectual property rights occur regularly in our industry.

Further, governments and courts are considering new issues in intellectual property law with respect to work created by artificial intelligence (“AI”) technology, which could result in different intellectual property…

We also seek to protect our important trademarks by endeavoring to register them in certain countries.

We seek to protect our products and product roadmaps in part by developing and/or securing proprietary rights relating to those products, including patents, trade secrets, know-how and continuing technological innovat…

other processing of proprietary, confidential and other information.

The ultimate impact of any future widespread health crisis on our operations and financial performance depends on many factors that are not within our control, including, but not limited, to: governmental, business an…

•increased operating expenses and potentially reduced efficiency of operations.

•general economic uncertainty in key global markets and financial market volatility; and

•requirements to comply with governmental and regulatory responses such as quarantines, import/export restrictions, price controls, or other governmental or regulatory actions, including closures or other restrictions…

•heightened risk and uncertainty regarding the loss or disruption of essential third-party service providers, including transportation services, contract manufacturing, marketing, and distribution services;

•disruption in our own ability to produce and ship products;

•disruptions to our third-party contract manufacturing and raw materials supply arrangements caused by constraints over our suppliers’ workforce capacity, financial, or operational difficulties;

•workforce constraints triggered by any applicable shutdown orders or stay-at-home policies;

•significant reductions in demand for one or more of our products or a curtailment to one or more of our product lines caused by, among other things, any temporary inability of our customers to purchase and utilize ou…

The outbreak of a widespread health crisis, whether global in scope or localized in an area in which we, our customers or our suppliers do business, could have an adverse effect on our operations and the operations of…

A widespread health crisis could adversely affect our business operations, financial performance, results of operations, financial position and the achievement of our strategic objectives.

•indebtedness on terms that are unfavorable to us, limit our operational flexibility or that we are unable to repay.

•expenditure of cash that would otherwise be available to operate our business; and

•dilution of our current stockholders as a result of any issuance of equity securities as acquisition consideration;

•diversion of management’s attention from other business concerns;

•difficulty managing customer transitions or entering into new markets;

•difficulties in coordinating and integrating geographically separated personnel, organizations, systems and facilities;

•increasing complexity from combining operations, including administrative functions, finance and human resources;

•coordinating new product and process development;

•conforming the acquired company’s standards, processes, procedures and controls with our operations, including integrating Enterprise Resource Planning (“ERP”) systems and other key business applications;

•unexpected expenses for cost of litigation or other legal proceedings related to the acquisition or the acquired company;

•insufficient net revenue or unexpected expenses that negatively impact our margins and profitability;

We may be unable to successfully implement our acquisitions strategy or integrate acquired companies and personnel with existing operations.

We have also faced litigation in connection with acquisitions, some of which continues following the consummation of the acquisition.

•diversion of management’s attention from normal daily operations of the business;

In connection with acquisitions, risks to us and our business include:

We face a number of risks related to pursuing strategic transactions.

•markets for 5G infrastructure not developing in the manner or in the time periods we anticipate, including as a result of unfavorable developments with evolving laws and regulations worldwide;

companies seek alternative solutions, which has reduced the demand for our products from some of our Chinese customers;

•changes in or limitations imposed by trade protection laws or other regulatory orders or requirements in the United States or in other countries, including changes in the trade policies of the U.S.

that address these markets may change and is difficult to predict.

Disruptions in access to bank deposits or lending commitments due to bank failures could adversely affect our liquidity, our business and financial condition.

Unstable market and economic conditions and adverse developments with respect to financial institutions and associated liquidity risk may have serious adverse consequences on our business and financial condition.

Based on internal review conducted in 2023, we determined that our products may be “subject to the EAR” and consequently restricted for export, reexport, and transfer to Huawei.

U.S.

•changes in laws and the adoption and interpretation of administrative rules and regulations, including U.S.

•headwinds caused by heightened, scheduled, or threatened tariffs imposed by the U.S.

Global economic conditions have in the past resulted in the actual or perceived failure and/or financial difficulties of many financial institutions.

The 2032 Capped Call Counterparties are financial institutions, and we will be subject to the risk that one or more of the 2032 Capped Call Counterparties may default under the 2032 Capped Call Options.

We are subject to counterparty risk with respect to the 2032 Capped Call Options.

In connection with the issuance of the 2032 Notes, we entered into the 2032 Capped Call Options with the 2032 Capped Call Counterparties.

The 2032 Capped Call Options may affect the value of our common stock.

Any of these factors could harm our business, results of operations, and financial condition.

Our current and future indebtedness could:

Our existing and future indebtedness could have important consequences to our stockholders and significant effects on our business.

Our current and future indebtedness may limit our operating flexibility or otherwise affect our business.

Our Credit Agreement contains various customary events of default that include, among others, non-payment of principal, interest or fees, inaccuracy of representations and warranties, breach of covenants, cross defaul…

Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness under the convertible notes, or to make cash payments in connection with any conversion of the convertibl…

We further face the risk of trademark infringement claims in various jurisdictions, which may increase as a result of acquisitions or expansion into new markets.

If we are unsuccessful in defending against infringement claims, we may be required to pay damages, enter into costly license agreements, redesign products, or cease selling certain products.

Our products may be subject to claims that they infringe the intellectual property rights of others.

In addition, evolving legal and regulatory frameworks governing intellectual property rights related to artificial intelligence (“AI”) may create uncertainty regarding ownership, scope, or enforceability of intellectu…