Due to the same-day announcement that it is being acquired by Marvell Technology (MRVL.US), optical communication component manufacturer Lumentum (LITE.US) moved up the release of its fiscal 2027 first-quarter earnings from the originally scheduled post-market on November 5 to pre-market on November 2.
The results showed quarterly revenue of $1.263 billion, surging 136.5% year-over-year and slightly above market expectations of approximately $1.25 billion; non-GAAP diluted earnings per share came in at $4.57, above the expected approximately $4.2. Non-GAAP gross margin was 53.2%, with a non-GAAP operating margin of 42.3%; GAAP net income was $360 million, compared to only $4.2 million in the same period last year.
By product segment, component business revenue reached $754 million, up 98.9% year-over-year; systems business revenue was $508 million, up 228.8% year-over-year. CEO Michael Hurlston stated that pump lasers and optical circuit switching (OCS) were the largest growth drivers in the quarter; the company has secured a second large NPO/CPO (near-packaged optics/co-packaged optics) order, with related purchase commitments exceeding $5 billion, and OCS demand visibility has expanded significantly in recent months, with the potential to become a multi-billion-dollar annual revenue source.
The company expects second-quarter revenue of $1.575 billion to $1.625 billion, an additional sequential increase of approximately $350 million; non-GAAP operating margin of 45% to 46%; and non-GAAP earnings per share of $5.90 to $6.20.
On the same day, Marvell Technology (MRVL.US) announced an all-stock acquisition of Lumentum: each Lumentum shareholder will receive 4.5 shares of Marvell common stock, equivalent to approximately $1,132 per share, representing a premium of about 23.9% over the October 28 closing price that was unaffected by acquisition rumors, with the transaction implying an enterprise value of approximately $115 billion.
By equity value, this is the largest M&A transaction of the year and the largest ever in the global technology sector (excluding the SpaceX and xAI merger). Lumentum's laser and optical technologies are used for high-speed transmission of massive data between data centers and serve as foundational support for AI infrastructure; Marvell had previously sourced laser technology from Lumentum and acquired photonics technology company Celestial AI earlier this year.
Nvidia (NVDA.US) also invested $2 billion in Lumentum in March this year for an equity stake and launched photonics technology collaboration. Marvell concurrently works with Amazon (AMZN.US) cloud business and Microsoft (MSFT.US) to develop custom AI chips, and in August also reached a TPU chip agreement with Google.
Data shows that as of the October 30 close, Lumentum stock stood at $840.70, up 128% year-to-date, with a market capitalization of approximately $76 billion; Marvell rose 131% year-to-date, with a market capitalization of $172.2 billion. The transaction is expected to close in the first half of 2028, with the combined company's target market size expected to expand to $550 billion, potentially achieving more than $1 billion in annual cost synergies, and Marvell Chairman and CEO Matt Murphy will lead the combined company.
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