Lumentum Holdings (LITE) 10-K risk factor changes: FY2023 vs FY2022

Our business operations are subject to numerous risks, factors and uncertainties, including those outside of our control, [removed: that] [added: which] could cause our actual results to be harmed, including risks regarding the following:

- the impact of the ongoing COVID-19 pandemic and responsive measures; [removed: and]

- challenges relating to supply chain [removed: constraints][added: constraints;]

- our reliance on a limited number of [added: suppliers and] customers;

- our international [removed: operations;][added: operations structure;]

- our [added: strategic transactions and] implementation strategy for our acquisitions;

- our ability to hire and retain key personnel; [added: and]

- the effects of immigration policy on our ability to hire and retain [removed: employees;][added: employees]

- our reliance on licensed third-party technology; [added: and]

[removed: Regulatory] [added: Risks Related to Legal, Regulatory] and [removed: Legal Factors][added: Compliance]

- our ability to obtain government authorization to export our products; [added: and]

- changes in social and environmental responsibility regulations, policies and provisions, as well as customer and investor [removed: demands;][added: demands]

- changes in laws and the adoption and interpretation of administrative rules and regulations, including U.S. and international customs and export regulations; [removed: and]

- our future capital requirements; [removed: and]

- our ability to service our current and future [removed: debt][added: debt;]

[removed: Governance Risks and Risks] [added: Risks] Related to [removed: Ownership of] Our [removed: Capital] [added: Common] Stock

- provisions of Delaware law and our certificate of incorporation and bylaws that may make a merger, tender offer or proxy contest difficult; [added: and]

- exclusive forum provisions in our [removed: bylaws;][added: bylaws]

- the volatility of the trading price of our common stock; [removed: and]

- our intention not to pay dividends for the foreseeable [removed: future][added: future;]

Our business operations, financial performance, results of operations, financial position and the achievement of our strategic objectives has been affected, and may be materially and adversely affected by the [removed: ongoing] [added: effects of the] COVID-19 [removed: pandemic.][added: pandemic and responsive actions thereto.]

The ultimate impact of the COVID-19 pandemic on our operations and financial performance depends on many factors that are not within our control, including, but not limited, to: governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic (including restrictions on travel and transport and workforce [removed: pressures);] [added: pressures particularly in China);] the impact of the pandemic and actions taken in response on global and regional economies, travel, and economic activity; [removed: the availability of federal, state, local or non-U.S. funding programs;] general economic uncertainty in key global markets and financial market volatility, including increasing levels of inflation in the United States; global economic conditions and levels of economic growth; and the [added: ongoing] pace of recovery [removed: when] [added: as] the COVID-19 pandemic subsides (including the availability and efficacy of treatments and vaccines and the impact of new variants on recovery).

[removed: The] [added: While the effects of COVID-19 pandemic are lessening, the] magnitude of the impact of COVID-19 on our business operations remains uncertain and difficult to predict, and the situation remains highly dynamic.

Due to increased demand across a range of industries, our business and customers’ businesses have experienced and [removed: are continuing to] [added: could] experience supply constraints due to both constrained manufacturing capacity, as well as component parts [removed: shortages, in particular semiconductor components, as our vendors have also been facing supply constraints, and increased logistics costs due to air travel and transport restrictions that limited the availability of flights on which we ship our products.][added: shortages.]

[removed: This constrained] [added: These] supply [removed: environment has] [added: constraints have] adversely affected and could further affect availability, lead-times and cost of [added: components, and could increase the likelihood of unexpected cancellations or delays of previously committed supply of key] components.

We continue to work with our suppliers to ensure that we are able to continue manufacturing and distributing our products, and in the quantities requested by our customers; however, [added: if] we continue to experience disruption to our supply [removed: chain that] [added: chain, it] could impact our operations.

[removed: Any] [added: Continued] disruption in the supply of the raw materials, packaging or components used in the manufacture and delivery of our products could have a material adverse impact on our business, financial condition and results of operations.

Limits on manufacturing availability or capacity or delays in production or delivery of components or raw materials [removed: due to COVID-related restrictions or otherwise] could further delay or inhibit our ability to obtain supply of components and produce finished goods inventory.

[removed: There] [added: Although the impact of the COVID-19 pandemic is lessening, there] can be no assurance that the [removed: current] supply chain impacts will not [removed: continue, or worsen,] [added: occur] in the future.

Historically, these pricing pressures have led to a continued decline of average selling prices across our [removed: business.][added: business and we expect that these historical trends will continue.]

The development of new, technologically advanced products is a complex and uncertain process requiring high levels of innovation and the accurate prediction of technology and market [removed: trends, and is further impacted by the disruptions caused by COVID-19 on our ability to continue with research and development activities and on our customers’ abilities to introduce new products and offerings.][added: trends.]

Future demand for our products is uncertain and will [added: primarily] depend [removed: to a great degree] on continued technological development and the introduction of new or enhanced products.

To preserve our revenues and product margin structures, we remain reliant on an integrated customer and market approach that anticipates end customer needs as [removed: Telecom and Datacom] requirements evolve.

We have consistently relied on a small number of customers for a significant portion of our sales, and in certain of our markets, such as [removed: 3D] [added: imaging and] sensing and commercial lasers, this customer concentration is particularly acute.

[removed: Some] [added: In addition,] customers provide us with their expected forecasts for our products several months in advance, but these customers may decrease, cancel or delay purchase orders already in place, including on short notice, or may experience financial difficulty which affects their ability to pay for products, particularly in light of the [removed: impacts of COVID-19 on their businesses] [added: global macroeconomic uncertainty,] and [removed: markets,] [added: have done so from time to time,] and the impact of any such actions may be intensified given our dependence on a limited number of large customers.

In addition, changes in the business requirements, vendor selection, project prioritization, financial prospects, capital resources, and expenditures, or purchasing behavior (including product mix purchased or timing of purchases) of our key customers, or any real or perceived quality issues related to the products that we sell to such customers, [removed: could significantly decrease our] [added: have led to decreased] sales to such customers or [removed: could lead to] delays or cancellations of planned purchases of our products or services, which [removed: increases the risk of quarterly fluctuations in] [added: has unfavorably impacted] our revenues and operating [removed: results.][added: results, and may continue to impact our business and results of operations.]

There are also continuing trade tensions, including an uncertain regulatory environment, in the U.S. and countries in Asia, which have [added: impacted] and could continue to materially impact our sales to key customers in these regions.

If forecasted orders do not materialize, we may need to reduce investment in R&D activities, we may fail to optimize our manufacturing [removed: capacity,] [added: capacity and incur charges for such underutilization,] we may incur liabilities with our suppliers for reimbursement of capital expenditures, or we may have excess inventory.

[removed: On] [added: In] August [removed: 17,] 2020, the Bureau of Industry and Security of the U.S. Department of Commerce (“BIS”) issued final rules that further restricted access by Huawei Technologies Co. Ltd. to items produced domestically and abroad from U.S. technology and software.

For example, we have been unable to supply certain additional products and may be limited or unable to work with Huawei on future product developments while Huawei remains on the Entity List, which [added: has negatively impacted our revenue from Huawei and] may [added: further] negatively impact our financial condition and results of operations.

- unfavorable economic and market conditions;

- failure of banking institutions and liquidity concerns at other financial institutions;

- our backlog may not be an accurate indicator of our level and timing of future revenue;

- our gross margins and operating margins may vary overtime;

- our ability to sell to a significant customer, as well as tariffs and other trade restrictions between the U.S. and China;

- volatility and maintenance of our real property portfolio;

- restructuring and related charges;

- dilution related to our convertible notes;

Risks Related to Our Business

Our operating results may be adversely affected by unfavorable changes in macroeconomics and market conditions and the uncertain geopolitical environment.

Current and future conditions in the global economy have an inherent degree of uncertainty.

As a result, it is difficult to estimate the level of growth or contraction of the global economy as a whole.

It is even more difficult to estimate growth or contraction in various parts, sectors, and regions of the economy, including the markets in which we participate.

All aspects of our forecasts depend on estimates of growth or contraction in the markets we serve.

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

The current global macroeconomic environment is volatile and continues to be significantly and adversely impacted by uncertainty in the banking and financial services sector, global supply chain constraints, inflation, and a dynamic demand environment.

Additionally, instability in the global credit markets, the impact of uncertainty regarding inflation, banking instability, capital expenditure reductions, unemployment, stock market volatility, the instability in the geopolitical environment in many parts of the world (including as a result of the on-going Russia-Ukraine war, and China-Taiwan relations), the current economic challenges in China, including global economic ramifications of Chinese economic difficulties, and other disruptions may continue to put pressure on global economic conditions.

Additionally, customers who had built up large inventories when supply chains were tight are now bringing down inventories as supply constraints are easing and in some cases these customers have delayed projected shipments.

These losses or delays of orders have harmed our revenue and profitability and future losses or delays may further harm our results of operations.

If global economic and market conditions, or economic conditions in key markets, remain uncertain or deteriorate further, our prospects for growth may be negatively impacted, and we may experience material and adverse impacts on our business, operating results, and financial condition.

Alternative sources to mitigate the risk that the failure of any sole supplier will adversely affect our business are not feasible in all circumstances.

If we were to lose any one of these or other critical sources, or there is as an industry-wide increase in demand for, or the discontinuation of, raw materials used in our products, it could be difficult for us, or we may be unable, to find an alternative supplier or raw material, in which case our operations could be adversely affected.

Difficulties in obtaining the materials, or services used in the conduct of our business or additional fees or higher prices to do so, have adversely affected our revenue and results of operations, and further challenges or decisions to seek alternate suppliers to secure supply in order to meet demand would increase our costs and reduce our profitability.

Our financial results may be adversely affected due to changes in product demand impacted by recessions, inflation, increases in interest rates, stagflation and other economic conditions.

Customer demand for our products may be impacted by weak economic conditions, inflation, stagflation, recessionary or lower-growth environments, rising interest rates, equity market volatility or other negative economic factors in the U.S. or other countries.

For example, under these conditions or expectation of such conditions, our customers may cancel orders, delay purchasing decisions or reduce their use of our services.

In addition, these economic conditions could result in higher inventory levels and the possibility of resulting excess capacity charges from our contract manufacturers if we need to slow production to reduce inventory levels.

Further, in the event of a recession or threat of a recession our contract manufacturers, suppliers and other third-party partners may suffer their own financial and economic challenges and as a result they may demand pricing accommodations, delay payment, or become insolvent, which could harm our ability to meet our customer demands or collect revenue or otherwise could harm our business.

Similarly, disruptions in financial and/or credit markets may impact our ability to manage normal commercial relationships with our contract manufacturers, customers, suppliers and creditors and might cause us to not be able to continue to access preferred sources of liquidity when we would like, and our borrowing costs could increase.

Thus, if the current economic conditions continue to deteriorate or experience a sustained period of weakness or slower growth, our business and financial results could be materially and adversely affected.

Additionally, we are also subject to risk from inflation and increasing market prices of certain components, supplies, and raw materials, which are incorporated into our products or used by our manufacturing partners or suppliers to manufacture our products.

These components, supplies and commodities have from time to time become restricted, or general market factors and conditions have affected pricing of such components, supplies and raw materials (such as inflation or supply chain constraints), and future restrictions or market conditions impacting pricing may adversely affect our business and results of operations.

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.

The recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures could materially and adversely affect our liquidity, our business and financial condition.

Even with our continued effort to mitigate counterparty risk by working with highly liquid, well capitalized counterparties, the failure of any bank in which we deposit our funds could reduce the amount of cash we have available for our operations or delay our ability to access such funds.

Any such failure may increase the possibility of a sustained deterioration of financial market liquidity.

The value of our investment portfolio could also be impacted if we hold debt instruments which were issued by any institutions that fail or become illiquid.

Our ability to obtain raw materials for our supply chain and collections of cash from sales may be unduly impacted if any of our vendors or customers are affected by illiquidity events.

Our backlog may not be an accurate indicator of our level and timing of future revenues.

Our backlog may not be a reliable indicator of future operating results.

General Economic Factors

Operational Factors

- our ability to sell to a significant customer;

- our reliance on a limited number of suppliers;

- any delay in collecting or failure to collect accounts receivable;

- our strategic transactions;

- our level of success in accessing new markets and obtaining new customers;

- our international structure;

- restructure charges;

- merger and acquisition related risks

- our ability to obtain antitrust approvals in connection with certain strategic transactions;

- the threat of tariffs;

Financing and Transactional Risks

Risk Related to Our Merger with NeoPhotonics

- failure to successfully integrate NeoPhotonics to our business;

- failure to realize the benefits expected from the Merger; and

- litigation in connection with the Merger

- dilution related to our 2024 Notes, 2026 Notes and 2028 Notes (each as defined below);

Our business, results of operations and financial performance have been negatively impacted by the evolution of the COVID-19 pandemic and related countermeasures and public health responses, such as shelter-in-place orders, social distancing protocols, and travel restrictions in many of the countries and regions in which we have operations or manufacturing partners.

The full extent to which the COVID-19 pandemic could impact our financial performance and results of operation will depend on future developments that are highly uncertain and cannot be accurately predicted, including COVID-19 infections intensifying or returning in various geographic areas, the severity and transmission rate of variants of the virus, new medical and other information that may emerge concerning COVID-19, the effectiveness of vaccines, and the actions by governmental entities or others to address it, contain it or treat its impact.

From the start of the COVID-19 pandemic, in early February 2020 Lumentum proactively implemented certain measures to limit the spread of the virus, such as travel restrictions, temporarily closed or limited the number of employees permitted onsite in our offices and manufacturing sites in several heavily impacted locations, implementation of vaccination guidelines in accordance with government mandates, and implemented work-from-home rules at most of our facilities.

These measures as well as others taken by us and others have caused, and may continue to cause, disruption and delays in our ability to operate and manufacture, test and assemble products in our internal facilities, particularly in the United States, China, Thailand and the United Kingdom.

Our ability to continue certain research and development activities has also been limited, which could materially and adversely affect our ability to develop new products and technologies on the timelines we previously anticipated.

New and potentially more contagious variants of the COVID-19 virus continue to develop in several countries, including regions in which we have significant operations.

If there is any further decline of the situation in countries where we operate or if the current situation persists for an extended period, our employees and operations could be significantly impacted.

In addition, we have experienced disruption and delays with our manufacturing partners, for example in Malaysia, limitations were imposed at certain times on which businesses could operate and the amount of the workforce permitted to perform manufacturing operations, and in the third quarter of fiscal 2022, we experienced a temporary factory closure in China as a result of an increase in the number of COVID-19 cases, as required by local government mandates.

These and other limitations have, in some instances, been reinstated, and could be reinstated again, if the number of COVID-19 cases in particular regions increases and there is considerable uncertainty regarding the duration of such limitations and potential future restrictions, and complexity in ensuring compliance.

Our supply chain has been, and continues to be, affected by measures implemented in response to the pandemic and in certain cases, our suppliers have not had the materials, capacity or capability to supply us with the components necessary for continuing our manufacturing operations or development efforts at our normal levels, such as the impacts we are experiencing from the shortages in semiconductor components.

There are also restrictions and delays on logistics, such as air cargo carriers, as well as increased logistics costs due to limited capacity and high demands for freight forwarders.

Similarly, our customers have also experienced, and could continue to experience, disruptions in their operations, which may result in reduced, delayed, or canceled orders, and has increased collection risks, which may adversely affect our results of operations.

Further, we have seen delayed deployments of 5G networks, particularly in China, which has harmed and may continue to harm our OpComms revenue.

These disruptions, delays and restrictions have adversely affected our revenue and results of operations and could be extended or further restrictions could be put in place in other regions, which would materially and adversely impact our revenue, results of operations and financial condition.

If we experience any significant difficulty in obtaining the materials or services used in the conduct of our business, these supply challenges may limit our ability to fully satisfy customer demand.

The COVID-19 pandemic has also contributed to and exacerbated this strain and may continue to cause volatility and uncertainty in customer demand.

As a result, we may experience increases in the costs to manufacture our products and may not be able to manufacture and deliver all of the orders placed by our customers in time.

Our relationships with large customers may also be harmed to the extent the impacts of the COVID-19 pandemic prevent us from being able to satisfy their orders in a timely manner.

Our competitors include Coherent (previously named II-VI), Acacia Communications (acquired by Cisco in 2021), Accelink, ams AG, Broadcom Inc., Fujitsu Optical Components, Furukawa Electric, IPG Photonics, Mitsubishi Electric, MKS Instruments, Molex, and O-Net Communications, Sumitomo Electric Industries, and Trumpf Group.

- potential global or regional recession as a result of the COVID-19 pandemic and related responses of individuals, governments and private industry;

- inflationary pressures that may occur as a result of economic recovery following the COVID-19 pandemic;

regulations applicable to us.

[removed: Please refer] [added: Refer] to “Risk Factors” and “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.*

We are an industry-leading provider of optical and photonic products, defined by revenue and market share, addressing a range of end-market applications including Optical [removed: Communications, which we refer to as OpComms,] [added: Communications (“OpComms”)] and [added: Commercial] Lasers [added: (“Lasers”)] for manufacturing, inspection and life-science applications.

We believe the global markets in which Lumentum participates have fundamentally robust, long-term trends that [added: will] increase the need for our photonics products and technologies.

We expect [added: that] the accelerating shift to digital and virtual approaches to [removed: all] [added: many] aspects of work and life [removed: that is driving staggering amounts of data in the world’s networks and cloud datacenters] will continue into the future.

We maintain leading positions in these [removed: fast growing] [added: fast-growing] OpComms markets through our extensive product portfolio, including reconfigurable optical add/drop multiplexers (“ROADMs”), coherent dense wavelength division multiplexing (“DWDM”) pluggable transceivers, and tunable small form-factor pluggable transceivers.

Our Lasers products serve our customers in markets and applications such as sheet metal processing, general manufacturing, [added: solar,] biotechnology, graphics and imaging, remote sensing, and precision machining such as drilling in printed circuit boards, wafer singulation, glass cutting and solar cell scribing.

Manufacturers use high-power, ultrafast lasers to create micro parts for consumer electronics and to process semiconductor, LED, [added: solar cells,] and other types of chips.

Use of ultrafast lasers for micromachining applications is being driven primarily by the increasing use of [added: renewable energy,] consumer electronics and connected devices globally.

[removed: *NeoPhotonics*][added: NeoPhotonics Merger]

On August 3, 2022 (the “Closing [removed: Date”),] [added: date”),] we completed our [removed: acquisition of] [added: merger with] NeoPhotonics Corporation (“NeoPhotonics”).

The addition of NeoPhotonics expands our [removed: opportunity] [added: opportunities] in some of the fastest growing markets for optical components used in cloud and telecom network infrastructure.

[removed: We expect the] [added: The] integrated company [removed: to be] [added: is] better positioned to serve the needs of a global customer base who are increasingly utilizing photonics to accelerate the shift to digital and virtual approaches to work and life, the proliferation of IoT, 5G, and next-generation mobile networks, and the transition to advanced cloud computing architectures.

Under the terms of the merger agreement, [removed: on Closing Date,] NeoPhotonics stockholders received $16.00 per share [removed: in cash] for each of [removed: their] [added: the] NeoPhotonics [removed: shares for a total cash consideration of $867.3 million.][added: common stock they own at the Closing date.]

[removed: Prior to the Closing Date, as] [added: As] contemplated by the merger agreement, on January 14, 2022, [added: Lumentum and NeoPhotonics] entered into a credit agreement [removed: with NeoPhotonics, pursuant to which we] [added: where Lumentum] agreed to make term loans (“loans”) to NeoPhotonics in an aggregate principal amount not to exceed $50.0 million to help fund capital expenditures and [removed: increased] [added: increase] working capital associated with NeoPhotonics’ growth plans.

The interest [removed: is] [added: was] payable monthly in arrears on the first day of each month.

The loans [removed: will mature] [added: would have matured] on January 14, [removed: 2024] [added: 2024,] unless earlier repaid or accelerated.

The $50.0 million loans in aggregate were not settled [removed: as of] [added: at] the Closing [removed: Date] [added: date,] and [removed: therefore] [added: therefore,] were [removed: considered] [added: included as] part of the total purchase price [removed: in connection with the merger.][added: consideration.]

[removed: During] [added: Of] the [added: $28.7 million of merger-related costs, $8.3 million was incurred in] fiscal year [removed: ended July 2, 2022, we incurred $8.4] [added: 2022 and $20.4] million [removed: of transaction costs related to our acquisition of NeoPhotonics,] [added: was incurred in fiscal year 2023,] which [removed: are] [added: was] recorded [removed: under] [added: as] selling, general and administrative [removed: expenses] [added: expense] in [removed: our] [added: the] consolidated [removed: statement] [added: statements] of operations.

[removed: Please refer] [added: Refer] to “Note 4.

[removed: Business Combination”] [added: Debt”] to the consolidated financial statements.

On August 15, 2022, we completed a transaction to acquire [removed: a business] [added: IPG Photonics’ telecom transmission product lines (“IPG telecom transmission product lines”)] that [removed: develops] [added: develop] and [removed: markets] [added: market] products for use in telecommunications and datacenter infrastructure, including Digital Signal Processors [removed: (DSP’s),] [added: (“DSPs”),] ASICs and optical transceivers.

This acquisition [removed: will help] [added: enables] us to expand our business in [removed: our] [added: the] OpComms segment.

[removed: Please refer] [added: Refer] to “Note [removed: 21.][added: 2.]

[removed: Subsequent Events”] [added: Commitments and Contingencies”] to the consolidated financial statements.

For more information on risks associated with the COVID-19 outbreak and regulatory actions, [removed: please] refer [removed: to the section titled “Risk Factors” in] Item 1A [removed: of Part I] [added: “Risk Factors”] of this [removed: report.][added: Annual Report.]

COVID-19 [removed: has] also created dynamics in the semiconductor component supply chains that have led to shortages of the types of components we and our customers require in our products.

[removed: These shortages] [added: Although the supply chain constraints] have [added: improved in the latter half of fiscal 2023, these shortages] impacted our ability to meet demand and generate revenue from certain products in fiscal 2022 [removed: and, if our ability to procure needed semiconductor components does not improve, this will impact our ability to supply our products to our customers] and [removed: may reduce our revenue and profit margin.][added: fiscal 2023.]

The impact of semiconductor component shortages may continue in the near term [removed: as] [added: with the exhaustion of] supplier and customer buffer inventories and safety [removed: stocks are exhausted.][added: stocks.]

Due to the global supply chain [removed: constraint,] [added: constraints,] we [removed: have] had to incur incremental supply and procurement costs in order to increase our ability to fulfill demands from our customers.

For more information on risks associated with supply chain [removed: constraints, please] [added: constraints and customer inventory,] refer to [removed: the section titled “Risk Factors” in] Item 1A [removed: of Part I] [added: “Risk Factors”] of this [removed: report.][added: Annual Report.]

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as set forth in the Financial Accounting Standards Board’s Accounting Standards Codification [removed: (“ASC”), and we consider the various staff accounting bulletins and other applicable guidance issued by the United States Securities and Exchange Commission (“SEC”).][added: (“ASC”).]

[removed: Inventory is] [added: Our inventories are] recorded at standard cost, which approximates actual cost computed on a first-in, first-out basis, not in excess of net realizable value.

We assess the value of our [removed: inventory] [added: inventories] on a quarterly basis and write down those inventories which are obsolete or in excess of our forecasted demand to the lower of their cost or estimated net realizable value.

If actual market conditions are more favorable than anticipated, [removed: inventory] [added: inventories] previously written down may be sold, resulting in lower cost of sales and higher income from operations than expected in that period.

- recognition of revenues when, or as, the contractual performance obligations are [removed: satisfied][added: satisfied.]

Revenues are recognized at a point in time when control of the promised goods or services are transferred to our customers upon shipment or [removed: delivery,] [added: delivery of goods or rendering of services,] in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the [removed: customer,] [added: customer] adjusted for estimated variable consideration, if any.

We typically estimate the impact on the transaction price for discounts offered to the [removed: customer] [added: customers] for early payments on receivables or net of accruals for estimated sales returns.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, [removed: that] [added: which] are collected by us from a customer and deposited with the relevant government authority, are excluded from revenue.

If a customer pays consideration, or [removed: if] we have a right to an amount of consideration that is unconditional before we transfer a good or service to the customer, those amounts are classified as deferred revenue or deposits received from customers which are included in other current liabilities or other long-term liabilities when the payment is made or [removed: when] it is due, whichever is earlier.

To maintain and grow our market and technology leadership positions, we are continually investing in new and differentiated products and technologies and customer programs that address both nearer-term and longer-term growth opportunities, both organically and through acquisitions, as well as continually improving and optimizing our operations.

Over many years, we have developed close relationships with market leading customers.

We seek to use our core optical and photonic technology and our volume manufacturing capability to expand into attractive emerging markets that benefit from advantages that optical or photonics-based solutions provide.

As a result, we paid $867.3 million of cash consideration to shareholders of NeoPhotonics on the Closing date.

We paid $22.6 million cash consideration to shareholders of NeoPhotonics for the vested and accelerated NeoPhotonics equity awards, of which $13.6 million was allocated to the purchase price consideration.

The remaining $9.0 million related to the payment of change-in-control provisions for certain executives, which were recognized as post-combination expenses due to the dual-trigger nature of the arrangements.

Additionally, we issued replacement equity awards (the “Replacement Awards”) in settlement of certain NeoPhotonics equity awards that did not become vested at the Closing date, with the total fair value of $40.2 million based on our closing stock price on the Closing date.

The portion of Replacement Awards attributed to pre-merger service was recorded as part of the consideration transferred, which was $3.5 million.

The total transaction consideration of $934.4 million was funded by the cash balances of the combined company.

We also recorded $28.7 million of merger-related costs, representing professional and other direct acquisition costs.

Acquisition of IPG Photonics’ Telecom Transmission Product Lines

The total purchase price of $55.9 million was paid in cash.

Business Combination” to the consolidated financial statements for additional information.

We continue to monitor the COVID-19 pandemic and actively assess potential implications to our business, supply chain, customer fulfillment sites, support operations and customer demand.

We also continue to take appropriate measures to protect the health and safety of our employees and to create and maintain a safe working environment.

While the effects of the COVID-19 pandemic have been lessening, if the adverse effects of COVID-19 or related responses of business or governments become more severe and prevalent or prolonged in the locations where we, our customers, suppliers or contract manufacturers conduct business, our business and results of operations could be materially and adversely affected in the future periods.

Our business and our customers’ businesses have been negatively impacted by worldwide logistics and supply chain issues, including constraints on available cargo capabilities and limited availability of once broadly available supplies of both raw materials and finished components.

If these shortages happen again in the future, they will impact our ability to supply our products to our customers and may reduce our revenue and profit margin.

In addition, in response to component shortages, certain of our customers accumulated inventory that they are now managing down as supply conditions improve.

Accordingly, ordering patterns are difficult to predict and have declined from recent periods.

For example, in the third quarter of fiscal 2023, a significant network equipment manufacturer informed us that due to their inventory management, it would not take the shipments we had originally projected for the quarter.

These trends continued through the end of fiscal 2023 and we expect some level of inventory management by our customers will continue to impact our business during fiscal 2024.

We also consider the various staff accounting bulletins and other applicable guidance issued by the United States Securities and Exchange Commission (“SEC”).

- Goodwill and Intangible Assets - Impairment Assessment

Our inventories are sensitive to technical obsolescence in the near term due to the use in industries characterized by the continuous introduction of new product lines, rapid technological advances, and product obsolescence.

Based on certain assumptions and judgments made from the information available at that time, we determine the amount of allowance for

potential inventory obsolescence.

If these estimates and related assumptions or the market changes, we may be required to record additional reserves.

Historically, actual results have not varied materially from our estimates.

Our income tax provision is highly dependent upon the geographic distribution of our worldwide earnings or losses, tax laws and regulations in various jurisdictions, tax incentives, the availability of tax credits and loss carryforwards, and the effectiveness of our tax planning strategies.

The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty.

Tax laws themselves are subject to change as a result of changes in fiscal policy, changes in legislation, and the evolution of regulations and court rulings and tax audits.

We may identify certain pre-acquisition contingencies as of the acquisition date and may extend our review and evaluation of these pre-acquisition contingencies throughout the measurement period in order to obtain sufficient information to assess whether these contingencies should be included as a part of the fair value of assets acquired and liabilities assumed and, if so, the amounts to be included.

Although we believe that the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain.

Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.

Goodwill and Intangible Assets - Impairment Assessment

Performing a quantitative goodwill impairment test includes the determination of the fair value of a reporting unit and involves significant estimates and assumptions.

These estimates and assumptions include, among others, revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and the determination of appropriate market comparables.

We make judgments about the recoverability of purchased finite lived intangible assets whenever events or changes in circumstances indicate that impairment may exist.

In such situations, we are required to evaluate whether the net book values of our finite lived intangible assets are recoverable.

Our OpComms customers include Accelink, Alphabet, Amazon, Apple, Ciena, Cisco Systems (including Acacia Communications, which was acquired by Cisco), Comcast, Infinera, Nokia Networks (including Alcatel-Lucent International), and ZTE.

Our Lasers customers include Amada, ASM Pacific Technology, DISCO, KLA-Tencor, Lasertec, Life Technologies, LPKF Laser & Electronics, Malvern Panalytical, and MKS Instruments.

*Other Acquisition*

Since February 2020, the COVID-19 pandemic has caused public health officials to recommend, and governments to enact, precautions to mitigate the spread of the virus, including travel restrictions and bans, extensive social distancing guidelines, closure or restrictions on business and quarantine or other types of “shelter-in-place” orders in many regions of the world.

The pandemic and these related responses continue to cause a global slowdown of economic activity (including a decrease in demand for a broad variety of goods and services), disruptions in global supply chains, labor shortages, and significant volatility and potential disruption of financial markets.

The ultimate extent to which COVID-19 will impact our business depends on future developments, which are highly uncertain and very difficult to predict, including the effectiveness and utilization of vaccines for COVID-19 and its variants, the severity of COVID-19 and its variants, and the effectiveness of the actions to contain or limit their spread.

From the start of the COVID-19 pandemic, we proactively implemented preventative measures and protocols, which we continuously assess and update for changes in conditions and emerging trends.

Some of these measures have included complying with local, state or federal orders that require employees to work from home, instructing employees to work from home in certain jurisdictions, limiting the number of employees onsite which slowed our manufacturing operations in certain countries, enhancing use of personal protective equipment and restricting non-critical business travel by our employees, enacting vaccine and testing mandates in certain jurisdictions, and implementing health and safety enhancements.

These measures are intended to safeguard our team members, contractors, suppliers, customers, distributors, and communities, and to ensure business continuity.

Currently, our major production facilities in Europe, Asia, and the United States remain open.

At most of our locations, we have transitioned from business continuity plans to return-to-office plans while continuing to maintain high standards of employee safety and sanitization protocols.

In the geographies where we have operations, we have, in general and where applicable, been deemed an essential business and been permitted to continue manufacturing and conducting new product development operations in a more limited capacity during the pandemic.

This stems from our critical role in global supply chains for the world’s communications and health-care systems.

However, the pandemic continues to affect our suppliers and manufacturers who are experiencing component materials and labor shortages.

Given the continually evolving situation, particularly in light of the recent Delta and Omicron variants, it is difficult to predict the magnitude and duration of the impact of the COVID-19 pandemic to our markets, its effects, or precisely when our ability to supply our products will return to full capacity.

We are continuing to actively monitor the situation and may take further actions altering our business operations that we determine are in the best interests of our employees, customers, communities, business partners, suppliers and stockholders, or as required by federal, state, or local authorities.

It is not clear what the potential effects any such alterations or modifications may have on our business, including the effects on our customers, employees and prospects, or on our financial results for the future.

Our primary strategic focus for several years has been technology and product leadership combined with close customer relationships in long-term healthy and growing markets.

We believe this strategy is even more apt, and our long-term opportunity is not diminished, with COVID-19.

We believe there are long-term opportunities, as the world’s experience with COVID-19 could drive an increasingly digital and virtual world, touching all aspects of life and work, that increasingly emphasizes the importance of communications systems, cloud services, augmented and virtual reality, and enhanced security.

Additionally, ever advancing electronic devices are needed to consume, produce, and communicate digital and virtual content.

All these trends could drive the need for higher volumes of higher performing optical devices that we could supply.

As such, we expect to continue to invest strongly in new products, technology and customer programs.

These costs have increased our inventory balances as of July 2, 2022 and may decrease our gross margin in the near term.

We expect component supply to be a challenge at least through the second quarter of fiscal 2023.

- Goodwill

As a result of our Merger Agreement with NeoPhotonics, we added Business Combinations and Goodwill to our critical accounting policies and estimates in fiscal 2022.

We estimate the economic lives of certain acquired assets and these lives are used to calculate depreciation and amortization expense.

If our estimates of the economic lives change, depreciation or amortization expenses could be accelerated or slowed.

Goodwill

The fair value of each of our goodwill reporting units is generally estimated using a combination of public company multiples and discounted cash flow methodologies.

| Impairment charges | | | — | | | | | | — | | | | | | 0.3 | | |

| Impairment charges | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | — | | % | | | | $ | — | | | | | $ | 4.3 | | | | | $ | (4.3) | | | | | (100.0) | | % |

| Percentage of net revenue | | | — | | % | | | | — | | % | | | | | | | | | | | | | | | | — | | % | | | | 0.3 | | % | | | | | | | | | | | | |

Net revenue increased by $64.2 million, or 3.8%, during fiscal 2021 as compared to fiscal 2020.

This increase was primarily due to a $105.6 million increase in OpComms revenue, partially offset by a $41.4 million decrease in Lasers revenue.

OpComms net revenue increased by $105.6 million, or 7.0%, during fiscal 2021 as compared to fiscal 2020.

Within OpComms, sales of Industrial and Consumer increased $67.7 million and Telecom and Datacom products increased by $37.9 million.

The Industrial and Consumer increase was primarily driven by an expansion of the available market due to an increased dollar content of 3D sensing lasers and higher adoption rates of 3D sensing in consumer electronic devices compared with the prior year.

Telecom and Datacom increased by $37.9 million primarily due to market growth and recovery from the impact of COVID-19 supply constraints.

Due to the impact of changes in foreign currency exchange rates between the U.S. Dollar and foreign currencies, [removed: for the fiscal years ended July 2, 2022, July 3, 2021, and June 27, 2020,] we recorded foreign exchange gains of [removed: $6.1 million,] [added: $7.0 million in fiscal 2023,] foreign exchange [removed: losses] [added: gains] of [removed: $4.4 million,] [added: $6.1 million in fiscal 2022,] and foreign exchange losses of [removed: $1.4 million, respectively,] [added: $4.4 million] in [removed: the other income (expense), net] [added: fiscal 2021,] in the consolidated statements of operations.

Although we sell primarily in the U.S. Dollar, we have foreign currency exchange risks related to our expenses denominated in currencies other than the U.S. Dollar, principally the Chinese Yuan, Canadian Dollar, Thai Baht, Japanese Yen, UK Pound, Swiss [removed: Franc] [added: Franc, Euro] and [removed: Euro.][added: Brazilian Real.]

In the event our foreign currency denominated monetary assets and liabilities, sales or expenses increase, our operating results may be [removed: more greatly] affected [added: to a greater extent] by fluctuations in the exchange rates of the currencies in which we do business as compared with the U.S. dollar.

We are exposed to equity price risk related to the conversion options embedded in our [added: 2029 Notes,] 2028 Notes, 2026 Notes and 2024 Notes.

We issued the [added: 2029 Notes in June 2023, the] 2028 Notes in March 2022, the 2026 Notes in December 2019 and the 2024 Notes in March 2017 with an aggregate principal amount of [added: $603.7 million,] $861.0 million, $1,050.0 million and $450.0 million, respectively.

The [removed: 2028] [added: 2029] Notes, [removed: 2026] [added: 2028] Notes and [added: 2026 Notes are carried at face value less issuance costs, while] the 2024 Notes are carried at face value less amortized discount [added: and issuance costs] on the condensed consolidated balance sheet.

The [added: 2029 Notes,] 2028 Notes, 2026 Notes and the 2024 Notes bear interest at a rate of [added: 1.50%,] 0.50%, 0.50% and 0.25% per year, respectively.

Since the [removed: Notes] [added: convertible notes] bear interest at fixed rates, we have no financial statement risk associated with changes in market interest rates.

However, the potential value of the shares to be distributed to the holders of our [removed: Notes] [added: convertible notes] changes when the market price of our stock fluctuates.

The [removed: 2028] [added: 2029] Notes, [removed: the 2026] [added: 2028] Notes and [removed: the 2024] [added: 2026] Notes will mature on [added: December 15, 2029,] June 15, 2028, December 15, 2026 [removed: and March 15, 2024,] respectively, unless earlier repurchased by us or converted pursuant to their terms, [removed: at] [added: and have] a conversion price of approximately [removed: $131.03] [added: $69.54] per share for the [removed: 2028] [added: 2029] Notes, approximately [removed: $99.29] [added: $131.03] per share for the [removed: 2026 Notes,] [added: 2028 Notes] and approximately [removed: $60.62] [added: $99.29] per share for the [removed: 2024] [added: 2026] Notes.

As of July [removed: 2, 2022,] [added: 1, 2023,] we had cash, cash equivalents, and short-term investments of [removed: $2,549.0] [added: $2,013.6] million.

As of July [removed: 2, 2022,] [added: 1, 2023,] the weighted-average life of our investment portfolio was approximately [removed: four] [added: six] months.

Based on our investment portfolio balance as of July [removed: 2, 2022,] [added: 1, 2023,] a hypothetical increase or decrease in interest rates of 1% (100 basis points) would have resulted in a decrease or an increase in the fair value of our portfolio of approximately [removed: $6.3] [added: $8.2] million, and a hypothetical increase or decrease of 0.50% (50 basis points) would have resulted in a decrease or an increase in the fair value of our portfolio of approximately [removed: $3.1] [added: $4.1] million.

As of July [removed: 2, 2022,] [added: 1, 2023,] we had approximately [removed: $235.9] [added: $254.3] million of unrestricted cash (excluding cash equivalents) in operating accounts that are held with domestic and international financial institutions.

The 2024 Notes will mature on March 15, 2024, unless earlier repurchased by us or converted pursuant to their terms, and have a conversion price of approximately $60.62 per share.

The value of our investment portfolio could also be impacted if we hold debt instruments which were issued by any institutions that fail or become illiquid.

Our ability to obtain raw materials for our supply chain and collections of cash from sales may be unduly impacted if any of our vendors or customers are affected by illiquidity events.

COVID-19 Risk

There are a number of market risk factors related to the COVID-19 pandemic and associated global economic impacts.

We continue to actively evaluate these risks, and have taken reserves and financial positions as of July 2, 2022 that we believe are reasonable based on the information currently available.

However, the COVID-19 pandemic and related regional shelter-in-place orders are unprecedented events that are continually evolving, and there could be significant changes and/or charges resulting in the future.

These market risks include, for example:

- Accounts receivable collectability - there could be significant bad debt expenses incurred if our customers experience financial difficulties.

- Accounts receivable collections timing - our working capital and cash flows could be impacted if we start to agree to longer payment terms for our customers.

Although we have not done so, a broader market move to longer payment terms could delay our collection timing as well.

- Inventory (excess and obsolete) - our customers may not be able to purchase inventory that we have built for them, or their demand may slow down to a point where inventory becomes aged.

- Short-term investment values - as seen in past economic slowdowns, there may be credit losses and defaults or a withdrawal of government support programs which cause losses and/or liquidity issues in our investment portfolio.

- Long-term assets such as fixed assets, goodwill, and intangibles - a market slowdown could impair the value of these assets.

- Tax valuation - we have significant NOL’s (Net Operating losses) in the United States which have associated deferred tax assets on our balance sheet, and these could be deemed unrecoverable in the future.

In addition, all of the below market risks are heightened in light of the current market situation.

Foreign exchange markets could be impacted and cause significant fluctuations in our future expenses.

The price of our common stock has fluctuated significantly in the past and global equity markets are experiencing significant volatility following the COVID-19 outbreak.

Interest rates have already reduced dramatically since the onset of the outbreak, and our future income from these investments likely will be negatively impacted in the future.

Lumentum Holdings Inc. (“we,” “us,” “our”, “Lumentum” or the “Company”) is an industry-leading provider of optical and photonic products [removed: defined by revenue and market share] addressing a range of end-market applications including Optical Communications (“OpComms”) and Commercial Lasers (“Lasers”) for manufacturing, inspection and life-science applications.

We seek to use our core optical and photonic technology, and our volume manufacturing capability, to expand into attractive emerging markets that benefit from advantages that optical or photonics-based solutions provide, including [removed: 3D] [added: imaging and] sensing for consumer electronics and diode light sources for a variety of [removed: automotive,] consumer and industrial applications.

The majority of our customers [removed: tend to be] [added: have historically been, and are currently,] original equipment manufacturers (“OEMs”) that incorporate our products into their [removed: products] [added: products,] which then address end-market applications.

For example, we sell fiber optic components that network equipment manufacturers (“NEMs”) assemble into communications networking systems, which they sell to communication service providers, hyperscale cloud [removed: operators] [added: operators,] and enterprises with their own networks.

Similarly, many of our [removed: customers for our] Lasers products [added: customers] incorporate our products into tools they produce, which are used for manufacturing processes by their customers.

For [removed: 3D] [added: imaging and] sensing, we sell diode lasers to manufacturers of consumer electronics products for mobile, personal computing, gaming, and other applications, including to the automotive industry, who then integrate our devices within their products, for eventual resale to consumers and also into other industrial applications.

We believe the global markets in which Lumentum participates have fundamentally robust, long-term trends that [added: will] increase the need for our photonics products and technologies.

We expect [added: that] the accelerating shift to digital and virtual approaches to [removed: all] [added: many] aspects of work and life [removed: that is driving staggering amounts of data in the world’s networks and cloud datacenters] will continue into the future.

We have a global [removed: marketing and sales] footprint that enables us to address global market opportunities for our [removed: products.][added: products with employees engaged in research and development (“R&D”), administration, manufacturing, support and sales and marketing activities.]

We have manufacturing capabilities and facilities in North America, South America, [removed: Asia-Pacific, and Europe, with employees engaged in research and development (“R&D”), administration, manufacturing, support and sales] [added: Asia-Pacific] and [removed: marketing activities.][added: Europe.]

Our headquarters are located in San Jose, California, and we employed approximately [removed: 6,815] [added: 7,500] full\-time employees around the world as of July [removed: 2, 2022.][added: 1, 2023.]

In August 2015, we were spun-off from JDSU and became an independent [removed: publicly-traded] [added: publicly traded] company through the distribution of our common stock by JDSU to its [removed: stockholders (the “Separation”).][added: stockholders.]

Notable amongst these acquisitions in the OpComms business were Agility Communications, Inc. in 2005 and Picolight, Inc. in 2007, which respectively brought widely tunable, long wavelength laser technology for metro and [removed: long haul] [added: long-haul] networking applications and short wavelength vertical-cavity surface-emitting lasers (“VCSELs”) for enterprise, datacenter networking, and 3D sensing applications.

Notable acquisitions in the Lasers business were Lightwave Electronics Corporation in 2005 and Time-Bandwidth Products Inc. [removed: (“Time-Bandwidth”)] in 2014.

[removed: On August 3, 2022, we completed our merger (“the Merger”) with] [added: The addition of] NeoPhotonics [removed: Corporation (“NeoPhotonics”), which we expect to expand] [added: expands] our opportunities in [added: some of] the [removed: market] [added: fastest growing markets] for optical components used in cloud and telecom network infrastructure.

[removed: On] [added: In] August [removed: 15,] 2022, we completed a transaction to acquire [removed: a business] [added: IPG Photonics’ telecom transmission product lines (“IPG telecom transmission product lines”)] that [removed: develops] [added: develop] and [removed: markets] [added: market] products for use in telecommunications and datacenter infrastructure, including Digital Signal Processors [removed: (DSP’s), ASICs] [added: (“DSPs”), application-specific integrated circuits (“ASICs”)] and optical transceivers.

This acquisition [removed: will enable us to expand] [added: has expanded] our business in [removed: our] [added: the] OpComms segment.

The OpComms markets we serve are experiencing [removed: continually] increasing needs for higher data transmission speeds, fiber optic network capacity and network agility.

This is driven by rapid growth in both the number of higher bandwidth broadband applications such as high-definition video, online gaming, cloud [removed: computing] [added: computing, artificial intelligence] and [added: machine learning, and] the number and scale of datacenters that require fiber optic links to enable the higher speeds and increased scale necessary to deliver high bandwidth video and other services.

Our optical and laser solutions, developed in close collaboration with OEM [removed: partners,] [added: partners and end users,] are well-positioned to meet demand resulting from these trends.

For more information on risks associated with the COVID-19 outbreak and regulatory actions, [removed: please] refer [removed: to the section titled “Risk Factors” in] Item 1A [removed: of Part I] [added: “Risk Factors”] of this [removed: report.][added: Annual Report.]

COVID-19 [removed: has] also created dynamics in the semiconductor component supply chains that have led to shortages of the types of components we and our customers require in our products.

[removed: These shortages] [added: Although the supply chain constraints] have [added: improved in the latter half of fiscal 2023, these shortages] impacted our ability to meet demand and generate revenue from certain products in fiscal 2022 [removed: and, they continue to impact our ability to meet demand today.][added: and fiscal 2023.]

If [removed: our ability to procure needed semiconductor components does not improve, this] [added: these shortages happen again in the future, they] will impact our ability to supply our products to our customers and may reduce our revenue and profit margin.

The impact of semiconductor component shortages may continue in the near term [removed: as] [added: with the exhaustion of] supplier and customer buffer inventories and safety [removed: stocks are exhausted.][added: stocks.]

Due to the global supply chain [removed: constraint,] [added: constraints,] we [removed: have] had to incur incremental supply and procurement costs in order to increase our ability to fulfill demands from our customers.

For more information on risks associated with supply chain [removed: constraints, please] [added: constraints and customer inventory,] refer to [removed: the section titled “Risk Factors” in] Item 1A [removed: of Part I] [added: “Risk Factors”] of this [removed: report.][added: Annual Report.]

For the geographic identification of these assets and for further information regarding our operating segments, [removed: please] refer to “Note [removed: 19.][added: 18.]

Additionally, our products address enterprise, cloud, and data center applications, including storage-access networks (“SANs”), local-area networks (“LANs”) and wide-area networks [removed: (“WANs”).][added: (“WANs”), as well as artificial intelligence and machine learning (“AI/ML”).]

We maintain leading positions in these [removed: fast growing] [added: fast-growing] OpComms markets through our extensive product portfolio, including reconfigurable optical add/drop multiplexers (“ROADMs”), coherent dense wavelength division multiplexing (“DWDM”) pluggable transceivers, and tunable small form-factor pluggable transceivers.

In the Consumer and Industrial market, our OpComms diode laser products include [removed: vertical cavity surface emitting lasers (“VCSELs”)] [added: VCSELs] and edge emitting lasers.

During fiscal [added: 2023,] 2022, [removed: 2021,] and [removed: 2020,] [added: 2021,] net revenue generated from a single customer which represented 10% or more of our total net revenue of the applicable fiscal year is summarized in the table below:

| | | | July [removed: 2, 2022] [added: 1, 2023] | | | | | | July [removed: 3, 2021] [added: 2, 2022] | | | | | | [removed: June 27, 2020] [added: July 3, 2021] | | |

| Apple | | | [removed: 28.7] [added: 12.1] | | % | | | | [removed: 30.2] [added: 28.7] | | % | | | | [removed: 26.0] [added: 30.2] | | % |

| Ciena | | | [removed: 12.6] [added: 15.3] | | % | | | | [removed: 10.1] [added: 12.6] | | % | | | | [removed: *] [added: 10.1] | | [added: %] |

| Huawei | | | * | | | | | | [removed: 10.8] [added: *] | | [removed: %] | | | | [removed: 13.2] [added: 10.8] | | % |

We believe the optical communications market has started to expand beyond a small number of very large service [removed: providers,] [added: providers] and is transitioning to a variety of open and captive networks created for in-house use by large video services, search engines and companies offering a variety of cloud computing services.

[added: Products] must provide higher levels of functionality and performance in compact designs that must also meet requirements for quality, reliability, and cost.

In the Telecom market, we provide transmission and transport solutions for optical networks that make up the backbone of the [removed: wireline] Telecom infrastructure, thereby enabling the internet, connections between cloud datacenters, and backhaul of data from wireless mobile networks.

In the Datacom market, optical transceivers are used to connect servers, switches, routers and other information technology infrastructure critical for today’s internet applications, web services, video streaming, enterprise [removed: networks] [added: networks, artificial intelligence] and [added: machine learning and] service provider solutions.

In August 2022, we completed our merger with NeoPhotonics Corporation (“NeoPhotonics”).

In addition, in response to component shortages, certain of our customers accumulated inventory that they are now managing down as supply conditions improve.

Accordingly, ordering patterns are difficult to predict and have declined from recent periods.

For example, in the third quarter of fiscal 2023, a significant network equipment manufacturer informed us that due to their inventory management, it would not take the shipments we had originally projected for the quarter.

These trends continued through the end of fiscal 2023 and we expect some level of inventory management by our customers will continue to impact our business during fiscal 2024.

We continue to monitor the COVID-19 pandemic and actively assess potential implications to our business, supply chain, customer fulfillment sites, support operations and customer demand.

We also continue to take appropriate measures to protect the health and safety of our employees and to create and maintain a safe working environment.

While the effects of the COVID-19 pandemic have been lessening, if the adverse effects of COVID-19 or related responses of business or governments become more severe and prevalent or prolonged in the locations where we, our customers, suppliers or contract manufacturers conduct business, our business and results of operations could be materially and adversely affected in the future periods.

| Nokia | | | 10.5 | | % | | | | * | | | | | | * | | |

For example, artificial intelligence and machine learning workloads require additional bandwidth compared to traditional computing workloads.

We also supply continuous wave (“CW”) lasers to customers utilizing silicon photonics to design and manufacture high speed datacom transceivers.

We compete against various public and private companies providing optical communications components.

During fiscal 2023, we completed our merger with NeoPhotonics and the acquisition of IPG telecom transmission product lines.

In fiscal 2023, we expanded our manufacturing footprint with our merger with NeoPhotonics and acquisition of the IPG telecom transmission product lines.

In light of these acquisitions, we have undertaken various initiatives to consolidate our manufacturing and operational sites.

Risks associated with reliance on third parties for the timely and reliable delivery of raw materials are discussed in greater detail in Item 1A “Risk Factors” of this Annual Report.

Internet, cloud, mobile, and broadband access network capacity requirements continue to grow at an unrelenting pace driven by the digital transformation of work and life, high-bandwidth video, gaming, and other applications.

After the Merger, Lumentum has a broader portfolio of next generation products and technologies positioned to address the market opportunity created by this strong growth in network capacity requirements, including NeoPhotonics ultra-pure light tunable lasers and photonics technologies for speed over distance applications.

Since February 2020, the COVID-19 pandemic has caused public health officials to recommend, and governments to enact, precautions to mitigate the spread of the virus, including travel restrictions and bans, extensive social distancing guidelines, closure or restrictions on business and quarantine or other types of “shelter-in-place” orders in many regions of the world.

The pandemic and these related responses continue to cause a global slowdown of economic activity (including a decrease in demand for a broad variety of goods and services), disruptions in global supply chains, labor shortages, and significant volatility and potential disruption of financial markets.

The ultimate extent to which COVID-19 will impact our business depends on future developments, which are highly uncertain and very difficult to predict, including the effectiveness and utilization of vaccines for COVID-19 and its variants, the severity of COVID-19 and its variants, and the effectiveness of the actions to contain or limit their spread.

From the start of the COVID-19 pandemic, we proactively implemented preventative measures and protocols, which we continuously assess and update for changes in conditions and emerging trends.

Some of these measures have included complying with local, state or federal orders that require employees to work from home, instructing employees to work from home in certain jurisdictions, limiting the number of employees onsite which slowed our manufacturing operations in certain countries, enhancing use of personal protective equipment and restricting non-critical business travel by our employees, enacting vaccine and testing mandates in certain jurisdictions, and implementing health and safety enhancements.

These measures are intended to safeguard our team members, contractors, suppliers, customers, distributors, and communities, and to ensure business continuity.

Currently, our major production facilities in Europe, Asia, and the United States remain open.

At most of our locations, we have transitioned from business continuity plans to return-to-office plans while continuing to maintain high standards of employee safety and sanitization protocols.

In the geographies where we have operations, we have, in general and where applicable, been deemed an essential business and been permitted to continue manufacturing and conducting new product development operations in a more limited capacity during the pandemic.

This stems from our critical role in global supply chains for the world’s communications and health-care systems.

However, the pandemic continues to affect our suppliers and manufacturers who are experiencing component materials and labor shortages.

Given the continually evolving situation, particularly in light of the recent Delta and Omicron variants, it is difficult to predict the magnitude and duration of the impact of the COVID-19 pandemic to our markets, its effects, or precisely when our ability to supply our products will return to full capacity.

We are continuing to actively monitor the situation and may take further actions altering our business operations that we determine are in the best interests of our employees, customers, communities, business partners, suppliers and stockholders, or as required by federal, state, or local authorities.

It is not clear what the potential effects any such alterations or modifications may have on our business, including the effects on our customers, employees and prospects, or on our financial results for the future.

Our primary strategic focus for several years has been technology and product leadership combined with close customer relationships in long-term healthy and growing markets.

We believe this strategy is even more apt, and our long-term opportunity is not diminished, with COVID-19.

We believe there are long-term opportunities, as the world’s experience with COVID-19 could drive an increasingly digital and virtual world, touching all aspects of life and work, that increasingly emphasizes the importance of communications systems, cloud services, augmented and virtual reality, and enhanced security.

Additionally, ever advancing electronic devices are needed to consume, produce, and communicate digital and virtual content.

All these trends could drive the need for higher volumes of higher performing optical devices that we could supply.

As such, we expect to continue to invest strongly in new products, technology and customer programs.

These costs have increased our inventory balances as of July 2, 2022 and may decrease our gross margin in the near term.

We expect component supply to be a challenge at least into the second half of fiscal 2023.

Our OpComms customers include Accelink, Alphabet, Amazon, Apple, Ciena, Cisco Systems (including Acacia Communications, which was acquired by Cisco), Comcast, Infinera, Nokia Networks (including Alcatel-Lucent International), and ZTE.

| | | | | | | | | | | | | | | | | | |

Products

For high volume, short distance applications we developed our vertical cavity surface emitting lasers (“VCSELs”).

We are a leading supplier of the critical laser

We compete against various companies in the markets we serve, including Coherent (previously named II-VI), Acacia Communications (acquired by Cisco in 2021), Accelink, ams AG, Broadcom Inc., Furukawa Electric, Mitsubishi Electric, and Sumitomo Electric Industries, as well as, private companies and subsidiaries of public companies providing optical communications components such as Fujitsu Optical Components, a subsidiary of Fujitsu; Nistica, a subsidiary of Molex; and O-Net.

Diode-pumped solid-state lasers provide excellent beam quality, low noise and exceptional reliability and are used in biotechnology, graphics and imaging, remote sensing, materials processing and precision machining applications.

Diode and direct-diode lasers address a wide variety of applications, including laser pumping, thermal exposure, illumination, ophthalmology, image recording, printing, plastic welding and selective soldering.

Gas lasers such as argon-ion and helium-neon lasers provide a stable, low-cost and reliable solution over a wide range of operating conditions, making them well-suited for complex, high-resolution OEM applications such as flow cytometry, DNA sequencing, graphics and imaging and semiconductor inspection.

Our Lasers customers include Amada, ASM Pacific Technology, DISCO, KLA-Tencor, Lasertec, Life Technologies, LPKF Laser & Electronics, Malvern Panalytical, and MKS Instruments.

*NeoPhotonics*

On November 4, 2021, we announced a merger agreement with NeoPhotonics.

On August 3, 2022, we completed the merger with NeoPhotonics, pursuant to which Lumentum acquired all of the outstanding shares of NeoPhotonics stock.

The addition of NeoPhotonics expands Lumentum’s opportunity in some of the fastest growing markets for optical components used in cloud and telecom network infrastructure.

architectures.

*Other Acquisition*

For a description of our material pending legal proceedings, refer to “Note 17.

Please refer to “Note 18.

For the fiscal year ended July [removed: 2, 2022][added: 1, 2023]

[removed: As of January 1, 2022, the] [added: The] aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately [removed: $4,648 million] [added: $1,949 million,] based on the closing sales price of the registrant’s common stock [added: on December 30, 2022 (the last business day of the registrant’s most recently completed second fiscal quarter) of $52.17 per share,] as reported on the NASDAQ Stock [removed: Market on December 31, 2021 of $105.77 per share.][added: Market.]

As of August [removed: 17, 2022,] [added: 16, 2023,] the Registrant had [removed: 68.1] [added: 66.7] million shares of common stock outstanding.

Portions of the information called for by Part III of this Annual Report on Form 10-K [removed: is] [added: are] hereby incorporated by reference from the definitive proxy statement for the Registrant’s annual meeting of stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after the Registrant’s fiscal year ended July [removed: 2, 2022.][added: 1, 2023.]

| | | | [ITEM [removed: 1.](#iea3219ff6aac4df3add24b5ea3f3a178_16)] [added: 1.](#ic267110da33842429c6bb39adb83d35b_16)] | | | [removed: [BUSINESS](#iea3219ff6aac4df3add24b5ea3f3a178_16)] [added: [BUSINESS](#ic267110da33842429c6bb39adb83d35b_16)] | | | [removed: [2](#iea3219ff6aac4df3add24b5ea3f3a178_16)] [added: [2](#ic267110da33842429c6bb39adb83d35b_16)] | | |

| | | | [ITEM [removed: 1A.](#iea3219ff6aac4df3add24b5ea3f3a178_2447)] [added: 1A.](#ic267110da33842429c6bb39adb83d35b_52)] | | | [RISK [removed: FACTORS](#iea3219ff6aac4df3add24b5ea3f3a178_2447)] [added: FACTORS](#ic267110da33842429c6bb39adb83d35b_52)] | | | [removed: [14](#iea3219ff6aac4df3add24b5ea3f3a178_2447)] [added: [12](#ic267110da33842429c6bb39adb83d35b_52)] | | |

| | | | [ITEM [removed: 1B.](#iea3219ff6aac4df3add24b5ea3f3a178_55)] [added: 1B.](#ic267110da33842429c6bb39adb83d35b_55)] | | | [UNRESOLVED STAFF [removed: COMMENTS](#iea3219ff6aac4df3add24b5ea3f3a178_55)] [added: COMMENTS](#ic267110da33842429c6bb39adb83d35b_55)] | | | [removed: [40](#iea3219ff6aac4df3add24b5ea3f3a178_55)] [added: [39](#ic267110da33842429c6bb39adb83d35b_55)] | | |

| | | | [ITEM [removed: 2.](#iea3219ff6aac4df3add24b5ea3f3a178_58)] [added: 2.](#ic267110da33842429c6bb39adb83d35b_58)] | | | [removed: [PROPERTIES](#iea3219ff6aac4df3add24b5ea3f3a178_58)] [added: [PROPERTIES](#ic267110da33842429c6bb39adb83d35b_58)] | | | [removed: [41](#iea3219ff6aac4df3add24b5ea3f3a178_58)] [added: [40](#ic267110da33842429c6bb39adb83d35b_58)] | | |

| | | | [ITEM [removed: 3.](#iea3219ff6aac4df3add24b5ea3f3a178_61)] [added: 3.](#ic267110da33842429c6bb39adb83d35b_61)] | | | [LEGAL [removed: PROCEEDINGS](#iea3219ff6aac4df3add24b5ea3f3a178_61)] [added: PROCEEDINGS](#ic267110da33842429c6bb39adb83d35b_61)] | | | [removed: [41](#iea3219ff6aac4df3add24b5ea3f3a178_61)] [added: [40](#ic267110da33842429c6bb39adb83d35b_61)] | | |

| | | | [ITEM [removed: 4.](#iea3219ff6aac4df3add24b5ea3f3a178_64)] [added: 4.](#ic267110da33842429c6bb39adb83d35b_64)] | | | [MINE SAFETY [removed: DISCLOSURES](#iea3219ff6aac4df3add24b5ea3f3a178_64)] [added: DISCLOSURES](#ic267110da33842429c6bb39adb83d35b_64)] | | | [removed: [41](#iea3219ff6aac4df3add24b5ea3f3a178_64)] [added: [40](#ic267110da33842429c6bb39adb83d35b_64)] | | |

| | | | [ITEM [removed: 5.](#iea3219ff6aac4df3add24b5ea3f3a178_70)] [added: 5.](#ic267110da33842429c6bb39adb83d35b_70)] | | | [MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#iea3219ff6aac4df3add24b5ea3f3a178_70)] [added: SECURITIES](#ic267110da33842429c6bb39adb83d35b_70)] | | | [removed: [42](#iea3219ff6aac4df3add24b5ea3f3a178_70)] [added: [41](#ic267110da33842429c6bb39adb83d35b_70)] | | |

| | | | [removed: [ITEM](#iea3219ff6aac4df3add24b5ea3f3a178_2608) [6](#iea3219ff6aac4df3add24b5ea3f3a178_2608)[.](#iea3219ff6aac4df3add24b5ea3f3a178_2608)] [added: [ITEM 6.](#ic267110da33842429c6bb39adb83d35b_73)] | | | [removed: [RESERVED](#iea3219ff6aac4df3add24b5ea3f3a178_2608)] [added: [RESERVED](#ic267110da33842429c6bb39adb83d35b_73)] | | | [removed: [43](#iea3219ff6aac4df3add24b5ea3f3a178_2608)] [added: [42](#ic267110da33842429c6bb39adb83d35b_73)] | | |

| | | | [removed: [ITEM](#iea3219ff6aac4df3add24b5ea3f3a178_76) [7](#iea3219ff6aac4df3add24b5ea3f3a178_76)[.](#iea3219ff6aac4df3add24b5ea3f3a178_76)] [added: [ITEM 7.](#ic267110da33842429c6bb39adb83d35b_76)] | | | [MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS](#iea3219ff6aac4df3add24b5ea3f3a178_76)] [added: OPERATIONS](#ic267110da33842429c6bb39adb83d35b_76)] | | | [removed: [44](#iea3219ff6aac4df3add24b5ea3f3a178_76)] [added: [43](#ic267110da33842429c6bb39adb83d35b_76)] | | |

| | | | [removed: [ITEM](#iea3219ff6aac4df3add24b5ea3f3a178_145) [7](#iea3219ff6aac4df3add24b5ea3f3a178_145)[A.](#iea3219ff6aac4df3add24b5ea3f3a178_145)] [added: [ITEM 7A.](#ic267110da33842429c6bb39adb83d35b_139)] | | | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#iea3219ff6aac4df3add24b5ea3f3a178_145)] [added: RISK](#ic267110da33842429c6bb39adb83d35b_139)] | | | [removed: [64](#iea3219ff6aac4df3add24b5ea3f3a178_145)] [added: [64](#ic267110da33842429c6bb39adb83d35b_139)] | | |

| | | | [removed: [ITEM](#iea3219ff6aac4df3add24b5ea3f3a178_148) [8](#iea3219ff6aac4df3add24b5ea3f3a178_148)[.](#iea3219ff6aac4df3add24b5ea3f3a178_148)] [added: [ITEM 8.](#ic267110da33842429c6bb39adb83d35b_142)] | | | [FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#iea3219ff6aac4df3add24b5ea3f3a178_148)] [added: DATA](#ic267110da33842429c6bb39adb83d35b_142)] | | | [removed: [66](#iea3219ff6aac4df3add24b5ea3f3a178_148)] [added: [65](#ic267110da33842429c6bb39adb83d35b_142)] | | |

| | | | [removed: [ITEM](#iea3219ff6aac4df3add24b5ea3f3a178_253) [9](#iea3219ff6aac4df3add24b5ea3f3a178_253)[.](#iea3219ff6aac4df3add24b5ea3f3a178_253)] [added: [ITEM 9.](#ic267110da33842429c6bb39adb83d35b_247)] | | | [CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL [removed: DISCLOSURE](#iea3219ff6aac4df3add24b5ea3f3a178_253)] [added: DISCLOSURE](#ic267110da33842429c6bb39adb83d35b_247)] | | | [removed: [122](#iea3219ff6aac4df3add24b5ea3f3a178_253)] [added: [126](#ic267110da33842429c6bb39adb83d35b_247)] | | |

| | | | [removed: [ITEM](#iea3219ff6aac4df3add24b5ea3f3a178_262) [9](#iea3219ff6aac4df3add24b5ea3f3a178_262)[C.](#iea3219ff6aac4df3add24b5ea3f3a178_262)] [added: [ITEM 9C.](#ic267110da33842429c6bb39adb83d35b_256)] | | | [DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT [removed: INSPECTIONS](#iea3219ff6aac4df3add24b5ea3f3a178_262)] [added: INSPECTIONS](#ic267110da33842429c6bb39adb83d35b_256)] | | | [removed: [124](#iea3219ff6aac4df3add24b5ea3f3a178_262)] [added: [129](#ic267110da33842429c6bb39adb83d35b_256)] | | |

| | | | [removed: [ITEM](#iea3219ff6aac4df3add24b5ea3f3a178_268) [10](#iea3219ff6aac4df3add24b5ea3f3a178_268)[.](#iea3219ff6aac4df3add24b5ea3f3a178_268)] [added: [ITEM 10.](#ic267110da33842429c6bb39adb83d35b_262)] | | | [DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE [removed: GOVERNANCE](#iea3219ff6aac4df3add24b5ea3f3a178_268)] [added: GOVERNANCE](#ic267110da33842429c6bb39adb83d35b_262)] | | | [removed: [125](#iea3219ff6aac4df3add24b5ea3f3a178_268)] [added: [130](#ic267110da33842429c6bb39adb83d35b_262)] | | |

| | | | [ITEM [removed: 1](#iea3219ff6aac4df3add24b5ea3f3a178_274)[2](#iea3219ff6aac4df3add24b5ea3f3a178_274)[.](#iea3219ff6aac4df3add24b5ea3f3a178_274)] [added: 12.](#ic267110da33842429c6bb39adb83d35b_268)] | | | [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER [removed: MATTERS](#iea3219ff6aac4df3add24b5ea3f3a178_274)] [added: MATTERS](#ic267110da33842429c6bb39adb83d35b_268)] | | | [removed: [125](#iea3219ff6aac4df3add24b5ea3f3a178_274)] [added: [130](#ic267110da33842429c6bb39adb83d35b_268)] | | |

| | | | [ITEM [removed: 1](#iea3219ff6aac4df3add24b5ea3f3a178_277)[3](#iea3219ff6aac4df3add24b5ea3f3a178_277)[.](#iea3219ff6aac4df3add24b5ea3f3a178_277)] [added: 13.](#ic267110da33842429c6bb39adb83d35b_271)] | | | [CERTAIN RELATIONSHIPS AND RELATED [removed: TRANSACTIONS AND] [added: TRANSACTIONS](#ic267110da33842429c6bb39adb83d35b_271)[,](#ic267110da33842429c6bb39adb83d35b_271) [AND] DIRECTOR [removed: INDEPENDENCE](#iea3219ff6aac4df3add24b5ea3f3a178_277)] [added: INDEPENDENCE](#ic267110da33842429c6bb39adb83d35b_271)] | | | [removed: [125](#iea3219ff6aac4df3add24b5ea3f3a178_277)] [added: [130](#ic267110da33842429c6bb39adb83d35b_271)] | | |

These statements relate to, among other things, our markets and industry, products and strategy, the impact of export regulation changes, [added: macroeconomic conditions, including supply chain conditions,] the impact of the COVID-19 pandemic and related responses of business and governments to the [removed: pandemic] [added: pandemic, instability and uncertainty in the banking and financial services markets, and tightening credit markets] on our business and results of operations, sales, gross margins, operating expenses, capital expenditures and requirements, liquidity, product development and R&D efforts, manufacturing plans, litigation, effective tax rates and tax reserves, our corporate and financial reporting structure, our plans for growth and innovation, our expectations regarding U.S.-China relations, market and regulatory conditions, trends and uncertainties in our business and financial results, [removed: and] our merger with NeoPhotonics and [added: acquisition of IPG Photonics’ telecom transmission product lines (“IPG telecom transmission product lines”), and] the successful integration of [removed: NeoPhotonics’s] [added: NeoPhotonics’] business (including personnel), and are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” “contemplate,” “believe,” “predict,” “potential” and similar expressions or variations intended to identify forward-looking statements.

Factors that could cause or contribute to such differences include, but are not limited to, those discussed in [removed: the section entitled “*Risk Factors*” included under Part I,] Item 1A [removed: below.][added: “Risk Factors” of this Annual Report.]

Furthermore, such forward-looking statements speak only as of the date of this [removed: report.][added: Annual Report.]

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| [PART I](#ic267110da33842429c6bb39adb83d35b_13) | | | | | | | | | | | |

| [PART II](#ic267110da33842429c6bb39adb83d35b_67) | | | | | | | | | | | |

| | | | [ITEM 9A.](#ic267110da33842429c6bb39adb83d35b_250) | | | [CONTROLS AND PROCEDURES](#ic267110da33842429c6bb39adb83d35b_250) | | | [127](#ic267110da33842429c6bb39adb83d35b_250) | | |

| | | | [ITEM 9B.](#ic267110da33842429c6bb39adb83d35b_253) | | | [OTHER INFORMATION](#ic267110da33842429c6bb39adb83d35b_253) | | | [129](#ic267110da33842429c6bb39adb83d35b_253) | | |

| [PART III](#ic267110da33842429c6bb39adb83d35b_259) | | | | | | | | | | | |

| | | | [ITEM 11.](#ic267110da33842429c6bb39adb83d35b_265) | | | [EXECUTIVE COMPENSATION](#ic267110da33842429c6bb39adb83d35b_265) | | | [130](#ic267110da33842429c6bb39adb83d35b_265) | | |

| | | | [ITEM 14.](#ic267110da33842429c6bb39adb83d35b_274) | | | [PRINCIPAL ACCOUNT](#ic267110da33842429c6bb39adb83d35b_274)[ANT](#ic267110da33842429c6bb39adb83d35b_274) [FEES AND SERVICES](#ic267110da33842429c6bb39adb83d35b_274) | | | [130](#ic267110da33842429c6bb39adb83d35b_274) | | |

| [PART IV](#ic267110da33842429c6bb39adb83d35b_277) | | | | | | | | | | | |

| | | | [ITEM 15.](#ic267110da33842429c6bb39adb83d35b_280) | | | [EXHIBIT](#ic267110da33842429c6bb39adb83d35b_280) [](#ic267110da33842429c6bb39adb83d35b_280)[AND](#ic267110da33842429c6bb39adb83d35b_280) [](#ic267110da33842429c6bb39adb83d35b_280)[FINANCIAL STATEMENT](#ic267110da33842429c6bb39adb83d35b_280) [SCHEDULES](#ic267110da33842429c6bb39adb83d35b_280) | | | [131](#ic267110da33842429c6bb39adb83d35b_280) | | |

| | | | [ITEM 16.](#ic267110da33842429c6bb39adb83d35b_283) | | | [FORM 10-K SUMMARY](#ic267110da33842429c6bb39adb83d35b_283) | | | [135](#ic267110da33842429c6bb39adb83d35b_283) | | |

| [SIGNATURES](#ic267110da33842429c6bb39adb83d35b_286) | | | | | | | | | [136](#ic267110da33842429c6bb39adb83d35b_286) | | |

| [PART I](#iea3219ff6aac4df3add24b5ea3f3a178_13) | | | | | | | | | | | |

| [PART II](#iea3219ff6aac4df3add24b5ea3f3a178_67) | | | | | | | | | | | |

| | | | [ITEM](#iea3219ff6aac4df3add24b5ea3f3a178_256) [9](#iea3219ff6aac4df3add24b5ea3f3a178_256)[A.](#iea3219ff6aac4df3add24b5ea3f3a178_256) | | | [CONTROLS AND PROCEDURES](#iea3219ff6aac4df3add24b5ea3f3a178_256) | | | [122](#iea3219ff6aac4df3add24b5ea3f3a178_256) | | |

| | | | [ITEM](#iea3219ff6aac4df3add24b5ea3f3a178_259) [9](#iea3219ff6aac4df3add24b5ea3f3a178_259)[B.](#iea3219ff6aac4df3add24b5ea3f3a178_259) | | | [OTHER INFORMATION](#iea3219ff6aac4df3add24b5ea3f3a178_259) | | | [124](#iea3219ff6aac4df3add24b5ea3f3a178_259) | | |

| [PART III](#iea3219ff6aac4df3add24b5ea3f3a178_265) | | | | | | | | | | | |

| | | | [ITEM 1](#iea3219ff6aac4df3add24b5ea3f3a178_271)[1](#iea3219ff6aac4df3add24b5ea3f3a178_271)[.](#iea3219ff6aac4df3add24b5ea3f3a178_271) | | | [EXECUTIVE COMPENSATION](#iea3219ff6aac4df3add24b5ea3f3a178_271) | | | [125](#iea3219ff6aac4df3add24b5ea3f3a178_271) | | |

| | | | [ITEM 1](#iea3219ff6aac4df3add24b5ea3f3a178_280)[4](#iea3219ff6aac4df3add24b5ea3f3a178_280)[.](#iea3219ff6aac4df3add24b5ea3f3a178_280) | | | [PRINCIPAL ACCOUNTING FEES AND SERVICES](#iea3219ff6aac4df3add24b5ea3f3a178_280) | | | [125](#iea3219ff6aac4df3add24b5ea3f3a178_280) | | |

| [PART IV](#iea3219ff6aac4df3add24b5ea3f3a178_283) | | | | | | | | | | | |

| | | | [ITEM 1](#iea3219ff6aac4df3add24b5ea3f3a178_286)[5](#iea3219ff6aac4df3add24b5ea3f3a178_286)[.](#iea3219ff6aac4df3add24b5ea3f3a178_286) | | | [EXHIBITS, FINANCIAL STATEMENTS SCHEDULES](#iea3219ff6aac4df3add24b5ea3f3a178_286) | | | [126](#iea3219ff6aac4df3add24b5ea3f3a178_286) | | |

| | | | [ITEM 1](#iea3219ff6aac4df3add24b5ea3f3a178_289)[6](#iea3219ff6aac4df3add24b5ea3f3a178_289)[.](#iea3219ff6aac4df3add24b5ea3f3a178_289) | | | [FORM 10-K SUMMARY](#iea3219ff6aac4df3add24b5ea3f3a178_289) | | | [130](#iea3219ff6aac4df3add24b5ea3f3a178_289) | | |

| [SIGNATURES](#iea3219ff6aac4df3add24b5ea3f3a178_292) | | | | | | | | | [131](#iea3219ff6aac4df3add24b5ea3f3a178_292) | | |

Our current corporate [removed: headquarters] [added: headquarters, which we own,] is approximately 238,000 square feet and located in San Jose, [removed: California which we own.][added: California.]

As of July [removed: 2, 2022,] [added: 1, 2023,] our leased and owned properties in total are approximately [removed: 2.5 million] [added: 3,100,000] square feet, of which we own approximately [removed: 1,447,000] [added: 1,964,000] square feet, including the 1,173,000 square feet manufacturing [removed: site] [added: sites] in Thailand, the [added: 250,000 square feet manufacturing sites in China, the] 238,000 square feet on the San Jose campus, [added: the 130,000 square feet manufacturing] and [added: R&D site in Japan, and] the [removed: 36,000] [added: 173,000] square feet manufacturing [added: and R&D sites] in Slovenia.

[removed: Larger leased] [added: Leased] sites include properties located in Canada, China, Italy, Japan, Switzerland, Taiwan, the United [removed: Kingdom and] [added: Kingdom,] the United [removed: States.][added: States, Brazil and South Korea.]

According to records of our transfer agent, we had [removed: 2,389] [added: 2,165] stockholders of record as of August [removed: 17, 2022] [added: 16, 2023,] and we believe there is a substantially greater number of beneficial holders.

The following graph compares the cumulative total return of our common stock with the total return for the NASDAQ Composite Index (the “IXIC”) and the NASDAQ 100 Technology Sector Index (the “NDXT”) from [added: market close on] July 3, [removed: 2016] [added: 2017 (the last trading day before the beginning of our fifth preceding fiscal year)] through July [removed: 2, 2022.][added: 1, 2023.]

[removed: ][added: ]

The following table sets forth issuer purchases of equity securities for the fourth quarter of fiscal [removed: 2022] [added: 2023] (*in millions, except share and per share amounts*):

| Period | | | | | | Total number of shares purchased [removed: (1)] [added: (1) (2)] | | | | | | Average price paid per share [removed: (2)] [added: (3)] | | | | | | Total number of shares purchased as part of publicly announced plans or programs [added: (2)] | | | | | | Maximum number (or approximation dollar value) of shares that may yet be purchased under the plans or programs | | |

[removed: (2)] [added: (3)] Average price paid per share includes costs associated with the repurchases.

[added: (2)] Separate from [removed: the 2021] [added: our] share buyback program and concurrent with the issuance of the [removed: 2028] [added: 2029] Notes, we repurchased [removed: 2.0] [added: approximately 2.3] million shares of our common stock in privately negotiated transactions in the [removed: third] [added: fourth] quarter of fiscal [removed: 2022.][added: 2023.]

The average price paid was [removed: $99.00] [added: approximately $53.49] per share for an aggregate purchase price of [removed: $200.0] [added: approximately $125.0] million.

| April 2, 2023 to April 29, 2023 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 584.5 | |

| April 30, 2023 to May 27, 2023 | | | | | | 337,437 | | | | | | $ | 43.99 | | | | | 337,437 | | | | | | $ | 569.6 | |

| May 28, 2023 to July 1, 2023 (2) | | | | | | 2,336,485 | | | | | | $ | 53.49 | | | | | 2,336,485 | | | | | | $ | 569.6 | |

| Total | | | | | | 2,673,922 | | | | | | $ | 52.29 | | | | | 2,673,922 | | | | | | $ | 569.6 | |

On April 5, 2023, our board of directors approved a further increase in our share buyback program, which authorizes us to use up to an aggregate amount of $1.2 billion (an increase from $1.0 billion) to purchase our own shares of common stock through May 2025, but may be suspended or terminated at any time.

| April 3, 2022 to April 30, 2022 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 513.5 | |

| May 1, 2022 to May 28, 2022 | | | | | | 304,000 | | | | | | $ | 86.34 | | | | | 304,000 | | | | | | $ | 487.2 | |

| May 29, 2022 to July 2, 2022 | | | | | | 961,200 | | | | | | $ | 80.13 | | | | | 961,200 | | | | | | $ | 410.2 | |

| Total | | | | | | 1,265,200 | | | | | | $ | 81.62 | | | | | 1,265,200 | | | | | | $ | 410.2 | |

The buyback program was authorized for 2 years.

The share buyback program may be suspended or terminated by the board of directors at any time.

We have audited the accompanying consolidated balance sheets of Lumentum Holdings Inc. and subsidiaries (the “Company”) as of July [removed: 2, 2022] [added: 1, 2023] and July [removed: 3, 2021,] [added: 2, 2022,] the related consolidated statements of operations, comprehensive income, cash flows, and stockholders’ equity for each of the three years in the period ended July [removed: 2, 2022,] [added: 1, 2023,] and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of July [removed: 2, 2022] [added: 1, 2023] and July [removed: 3, 2021,] [added: 2, 2022,] and the results of its operations and its cash flows for each of the three years in the period ended July [removed: 2, 2022,] [added: 1, 2023,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of July [removed: 2, 2022,] [added: 1, 2023,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August [removed: 24, 2022,] [added: 23, 2023,] expressed an unqualified opinion on the Company's internal control over financial reporting.

[removed: Critical] [added: *Critical] Audit [removed: Matter][added: Matter Description*]

The critical audit [removed: matter] [added: matters] communicated below [removed: is a matter] [added: are matters] arising from the current-period audit of the financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that (1) [removed: relates] [added: relate] to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matter] [added: matters] below, providing a separate opinion on the critical audit [removed: matter] [added: matters] or on the accounts or disclosures to which [removed: it relates.][added: they relate.]

We identified the valuation of inventory as a critical audit matter because of the significant assumptions management makes with regards to estimating [added: certain elements of] the excess and obsolete write downs.

| | | | | | | | | | | | | | | | July [removed: 2, 2022] [added: 1, 2023] | | | | | | July [removed: 3, 2021] [added: 2, 2022] | | | | | | [removed: June 27, 2020] [added: July 3, 2021] | | |

| Net revenue | | | | | | | | | | | | | | | $ | [removed: 1,712.6] [added: 1,767.0] | | | | | $ | [removed: 1,742.8] [added: 1,712.6] | | | | | $ | [removed: 1,678.6] [added: 1,742.8] | |

| Cost of sales | | | | | | | | | | | | | | | [removed: 861.1] [added: 1,113.6] | | | | | | [removed: 898.0] [added: 861.1] | | | | | | [removed: 974.6] [added: 898.0] | | |

| Amortization of acquired developed intangibles | | | | | | | | | | | | | | | [removed: 62.9] [added: 84.4] | | | | | | [removed: 61.7] [added: 62.9] | | | | | | [removed: 53.8] [added: 61.7] | | |

| Gross profit | | | | | | | | | | | | | | | [removed: 788.6] [added: 569.0] | | | | | | [removed: 783.1] [added: 788.6] | | | | | | [removed: 650.2] [added: 783.1] | | |

| Research and development | | | | | | | | | | | | | | | [removed: 220.7] [added: 307.8] | | | | | | [removed: 214.5] [added: 220.7] | | | | | | [removed: 198.6] [added: 214.5] | | |

| Selling, general and administrative | | | | | | | | | | | | | | | [removed: 265.7] [added: 348.8] | | | | | | [removed: 241.4] [added: 265.7] | | | | | | [removed: 235.2] [added: 241.4] | | |

| Restructuring and related charges | | | | | | | | | | | | | | | [removed: (1.1)] [added: 28.1] | | | | | | [removed: 7.7] [added: (1.1)] | | | | | | [removed: 8.0] [added: 7.7] | | |

| Merger termination fee and related costs, net | | | | | | | | | | | | | | | — | | | | | | [removed: (207.5)] [added: —] | | | | | | [removed: —] [added: (207.5)] | | |

| Total operating expenses | | | | | | | | | | | | | | | [removed: 485.3] [added: 684.7] | | | | | | [removed: 256.1] [added: 485.3] | | | | | | [removed: 446.1] [added: 256.1] | | |

| Income [added: (loss)] from operations | | | | | | | | | | | | | | | [removed: 303.3] [added: (115.7)] | | | | | | [removed: 527.0] [added: 303.3] | | | | | | [removed: 204.1] [added: 527.0] | | |

| Interest expense | | | | | | | | | | | | | | | [removed: (80.2)] [added: (35.5)] | | | | | | [removed: (66.7)] [added: (80.2)] | | | | | | [removed: (61.2)] [added: (66.7)] | | |

| Other [removed: income (expense),] [added: income,] net | | | | | | | | | | | | | | | [removed: 12.0] [added: 48.8] | | | | | | [removed: 2.8] [added: 12.0] | | | | | | [removed: 31.4] [added: 2.8] | | |

| Income before income taxes | | | [removed: | | | | |] [added: $] | [added: (102.4)] | | | | | [added: $] | 235.1 | | | | | [added: $] | 463.1 | | [removed: | | | | 174.3 | | |]

| [removed: Provision for income taxes] [added: Income tax provision] | | | | | | | | | | | | | | | [removed: 36.2] [added: 29.2] | | | | | | [removed: 65.8] [added: 36.2] | | | | | | [removed: 38.8] [added: 65.8] | | |

| Net income [added: (loss)] | | | | | | | | | | | | | | | $ | [removed: 198.9] [added: (131.6)] | | | | | $ | [removed: 397.3] [added: 198.9] | | | | | $ | [removed: 135.5] [added: 397.3] | |

| Net income [added: (loss)] per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic | | | | | | | | | | | | | | | $ | [removed: 2.79] [added: (1.93)] | | | | | $ | [removed: 5.27] [added: 2.79] | | | | | $ | [removed: 1.79] [added: 5.27] | |

| Diluted | | | | | | | | | | | | | | | $ | [removed: 2.68] [added: (1.93)] | | | | | $ | [removed: 5.07] [added: 2.68] | | | | | $ | [removed: 1.75] [added: 5.07] | |

| Shares used to compute net income [added: (loss)] per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic | | | | | | | | | | | | | | | [removed: 71.2] [added: 68.3] | | | | | | [removed: 75.4] [added: 71.2] | | | | | | [removed: 75.9] [added: 75.4] | | |

| Diluted | | | | | | | | | | | | | | | [removed: 74.2] [added: 68.3] | | | | | | [removed: 78.4] [added: 74.2] | | | | | | [removed: 77.6] [added: 78.4] | | |

CONSOLIDATED STATEMENTS OF COMPREHENSIVE [removed: INCOME][added: INCOME (LOSS)]

| | | | July [removed: 2, 2022] [added: 1, 2023] | | | | | | July [removed: 3, 2021] [added: 2, 2022] | | | | | | | | | | | | [removed: June 27, 2020] [added: July 3, 2021] | | |

| Net income [added: (loss)] | | | $ | [removed: 198.9] [added: (131.6)] | | | | | $ | [removed: 397.3] [added: 198.9] | | | | | | | | | | | $ | [removed: 135.5] [added: 397.3] | |

| Net change in unrealized gain (loss) on available-for-sale securities | | | [removed: (10.2)] [added: 4.4] | | | | | | [removed: (2.5)] [added: (10.2)] | | | | | | | | | | | | [removed: 1.5] [added: (2.5)] | | |

| Net change in defined benefit obligations | | | [removed: 2.4] [added: (1.4)] | | | | | | [removed: 2.8] [added: 2.4] | | | | | | | | | | | | [removed: (0.7)] [added: 2.8] | | |

| Other comprehensive income (loss), net of tax | | | [removed: (7.8)] [added: 3.7] | | | | | | [removed: 0.3] [added: (7.8)] | | | | | | | | | | | | [removed: 0.8] [added: 0.3] | | |

| Comprehensive [removed: income,] [added: income (loss),] net of tax | | | $ | [removed: 191.1] [added: (127.9)] | | | | | $ | [removed: 397.6] [added: 191.1] | | | | | | | | | | | $ | [removed: 136.3] [added: 397.6] | |

| | | | July [added: 1, 2023 | | | | | | July] 2, 2022 | | | | | | July 3, 2021 | | |

| Cash and cash equivalents | | | $ | [removed: 1,290.2] [added: 859.0] | | | | | $ | [removed: 774.3] [added: 1,290.2] | |

| Short-term investments | | | [removed: 1,258.8] [added: 1,154.6] | | | | | | [removed: 1,171.7] [added: 1,258.8] | | |

| Accounts receivable, net | | | [removed: 262.0] [added: 246.1] | | | | | | [removed: 212.8] [added: 262.0] | | |

Critical Audit Matters

Business Combination – Refer to Notes 1 and 4 to the financial statements

The Company completed the acquisition of NeoPhotonics Corporation for a total consideration of $934.4 million on August 3, 2022.

Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including intangible assets of $412.5 million.

Intangible assets acquired primarily related to developed technology, in process research and development (“IPR&D”) and customer relationships.

Management estimated the fair value of the intangible assets using valuation techniques which includes the use of a discounted cash flow model.

The fair value determination of the intangible assets required management to make significant estimates and assumptions, including future expected revenue, expenses, capital expenditures and other costs, as well as discount rates.

We identified the fair value of acquired intangible assets from the NeoPhotonics acquisition as a critical audit matter because of the significant business assumptions and estimates used in the valuation of acquired entity intangible assets that possess higher degrees of complexity and sensitivity to the valuations.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our internal fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s assumptions.

The significant assumptions and estimates used to estimate the fair value of NeoPhotonics intangible assets relate primarily to the forecasted revenue growth rates, the expected period over which the intangible assets are expected to produce cash flows (“technological retention factors”), the period required for customer revenues to mature (“customer ramp periods”) and the discount rates applied to these future cash flows.

*How the Critical Audit Matter Was Addressed in the Audit*

Our audit procedures related to the fair value of the acquired intangible assets, specifically as they relate to significant assumptions and estimates including forecasted revenue growth rates, technological retention factors, customer ramp periods, and discount rates, included the following, among others:

- We tested the effectiveness of internal controls over the valuation and accounting for the acquired intangible assets, including management’s controls related to the forecasted revenue growth rate, selection of technological retention factors, customer ramp periods, and discount rate.

- We assessed the reasonableness of management’s forecast of future revenues by comparing the projected growth rates to historical results, certain peer companies, and industry data.

- We evaluated whether the estimated future revenues were consistent with evidence obtained in other areas of the audit.

- We evaluated the reasonableness of management’s selection of technological retention factors and customer ramp periods by understanding the development status and life cycle of each product and comparing management’s assumptions to historical product and customer data and information obtained in other areas of the audit.

- With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rate by:

◦Testing the source information underlying the determination of the discount rate and testing the mathematical accuracy of the calculation

◦Developing a range of independent estimates and comparing those to the discount rate selected by management.

August 23, 2023

| Net change in cumulative translation adjustment | | | 0.7 | | | | | | — | | | | | | | | | | | | — | | |

| | | | July 1, 2023 | | | | | | July 2, 2022 | | |

| Amortization and write-off of acquired intangible assets | | | 149.0 | | | | | | 85.5 | | | | | | 85.7 | | |

| Gain on repurchase of convertible notes | | | (1.0) | | | | | | — | | | | | | — | | |

| Acquisition of businesses, net of cash acquired | | | (861.6) | | | | | | — | | | | | | — | | |

| Repurchase and conversion of 2024 Notes | | | (132.8) | | | | | | (1.8) | | | | | | — | | |

| Payment of withholding taxes related to net share settlement of restricted stock units | | | (37.2) | | | | | | (39.0) | | | | | | (39.7) | | |

| Settlement of loan to NeoPhotonics | | | 50.0 | | | | | | — | | | | | | — | | |

| 2029 Notes issuance costs in current liabilities | | | 0.8 | | | | | | — | | | | | | — | | |

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| Cumulative adjustment from adoption of ASU 2020-06 | | | | | | | | | | | | | | | — | | | | | | $ | — | | | | | $ | (426.5) | | | | | $ | 85.6 | | | | | $ | — | | | | | | | | | | | $ | (340.9) | |

August 24, 2022

| Impairment charges | | | | | | | | | | | | | | | — | | | | | | — | | | | | | 4.3 | | |

| Loss on early extinguishment of debt | | | — | | | | | | — | | | | | | 8.0 | | |

| Tax payments related to restricted stock | | | (39.0) | | | | | | (39.7) | | | | | | (14.0) | | |

| Payment for conversions of 2024 Notes | | | (1.8) | | | | | | — | | | | | | — | | |

| Net transfer of assets from property plant and equipment to assets held-for-sale | | | — | | | | | | — | | | | | | 3.1 | | |

| Balance as of June 29, 2019 | | | | | | | | | | | | | | | 76.7 | | | | | | $ | 0.1 | | | | | $ | 1,360.8 | | | | | $ | 129.1 | | | | | $ | 7.1 | | | | | | | | | | | $ | 1,497.1 | |

| Net income | | | | | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | 135.5 | | | | | | — | | | | | | | | | | | | 135.5 | | |

| Exercise of stock options | | | | | | | | | | | | | | | — | | | | | | — | | | | | | 0.7 | | | | | | — | | | | | | — | | | | | | | | | | | | 0.7 | | |

| Equity component of the 2026 Notes, net of tax of $67.0 million and issuance costs of $2.3 million | | | | | | | | | | | | | | | — | | | | | | — | | | | | | 245.9 | | | | | | — | | | | | | — | | | | | | | | | | | | 245.9 | | |

We are now in the third year of the COVID-19 pandemic, and while the impact of the pandemic is lessening, new variants are causing continued concern.

However, due to the global supply chain constraint, we have had to incur incremental supply and procurement costs in order to fulfill demand from our customers.

These higher costs have increased our inventory balances by $16.8 million as of July 2, 2022 and may decrease our gross margin in the near term.

Certain prior period amounts have been reclassified to conform to the current period presentation.

The reclassification of the prior period amounts did not impact previously reported consolidated financial statements.

On November 4, 2021, Lumentum and NeoPhotonics Corporation (“NeoPhotonics”) announced a merger agreement (the “Merger Agreement”) pursuant to which Lumentum will acquire all outstanding shares of NeoPhotonics stock.

Subsequent Events”.

We adopted Topic 842 on June 30, 2019, the first day of fiscal year 2020, using the modified retrospective transition approach.

The change in our functional currency was made as a result of significant changes in economic facts and circumstances, primarily the acquisition of Oclaro, a U.S. dollar-denominated functional currency company, and the predominant use of the U.S. dollar, including when negotiating with customers and major suppliers.

In December 2019, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, *Simplifying the Accounting for Income Taxes (Topic 740),* which is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and which also clarifies and amends existing guidance to improve consistent application.

ASU 2019-12 was effective for us at the beginning of fiscal year 2022, including interim periods within that reporting period.

We adopted ASU 2019-12 in our first quarter of fiscal year 2022 on a prospective basis with no material impact to our consolidated financial statements.

Accounting Pronouncements Not Yet Effective

ASU 2021-08 is effective for us in our first quarter of fiscal year 2024.

The impact of the adoption of ASU 2021-08 will depend on the contract assets and liabilities acquired in a business combination after that date, unless early adopted.

The new guidance is effective for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020.

ASU 2020-06 is effective for us in the first quarter of fiscal year 2023.

We plan to adopt ASU 2020-06 using the modified retrospective approach as of July 3, 2022.

The adoption of this new guidance is anticipated to reduce interest expense by approximately $75 million during the fiscal year ended July 1, 2023.

Potentially dilutive common shares result from the assumed exercise of outstanding stock options, assumed vesting of outstanding equity awards, assumed issuance of stock under the employee stock purchase plan, and assumed conversion of our outstanding Notes, all using the treasury stock method.

We have the ability and intent to settle the face value of our Notes in cash.

Therefore, we use the treasury stock method for calculating the dilutive impact of the Notes.

- The 2026 Notes and the 2028 Notes will have no impact on diluted earnings per share until the average price of our common stock exceeds the conversion price of $99.29 and $131.03, respectively.

- The potentially dilutive shares resulting from the 2024 Notes were included in the calculation of diluted income per share for the years ended July 2, 2022, July 3, 2021 and June 27, 2020 since the average price of our common stock exceeded the conversion price of $60.62.

Anti-dilutive potential shares are excluded from the calculation of diluted earnings per share if their exercise price exceeded the average market price during the period or the share-based awards were determined to be anti-dilutive based on applying the treasury stock method.

On November 4, 2021, Lumentum and NeoPhotonics Corporation (“NeoPhotonics”) announced a merger agreement (the “Merger Agreement”).

On August 3, 2022 (the “Closing Date”), we completed the merger with NeoPhotonics, pursuant to which Lumentum acquired all of the outstanding shares of NeoPhotonics stock.

The acquisition will be accounted for as a business combination using the acquisition method of accounting, which requires, among other things, certain assets acquired and liabilities assumed to be recognized at their fair values as of the acquisition date.

We are currently evaluating the purchase accounting for the acquisition.

Sale of Assets and Dispositions

Management, with the participation of our chief executive officer and our chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of July [removed: 2, 2022.][added: 1, 2023.]

Based on the evaluation of our disclosure controls and procedures as of July [removed: 2, 2022,] [added: 1, 2023,] our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level.

Based on the assessment, management has concluded that its internal control over financial reporting was effective as of July [removed: 2, 2022] [added: 1, 2023] to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP.

Deloitte & Touche LLP, the independent registered public accounting firm that audited the consolidated financial statements included in this Form 10-K, has issued a report, included herein, on the effectiveness of the Company’s internal control over financial reporting as of July [removed: 2, 2022.][added: 1, 2023.]

[removed: There] [added: Other than the impact of these business acquisitions, there] were no changes in our internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f), identified in connection with the evaluation required by Exchange Act Rules 13a-15(d) or 15d-15(d) that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We have audited the internal control over financial reporting of Lumentum Holdings Inc. and subsidiaries (the “Company”) as of July [removed: 2, 2022,] [added: 1, 2023,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of July [removed: 2, 2022,] [added: 1, 2023,] based on criteria established in *Internal Control - Integrated Framework [removed: (2013)*] [added: (2013)] issued by [removed: COSO.][added: COSO*.]

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended July [removed: 2, 2022,] [added: 1, 2023,] of the Company and our report dated August [removed: 24, 2022,] [added: 23, 2023,] expressed an unqualified opinion on those financial statements.

On August 3, 2022, we completed the acquisition of NeoPhotonics Corporation.

On August 15, 2022, we completed the acquisition of IPG Photonics’ telecom transmission product lines.

We excluded the acquired entities from our assessment of internal control over financial reporting as of July 1, 2023.

Total assets and revenues of the acquired entities that were excluded from our assessment of internal control over financial reporting constitute in aggregate of approximately 22% and 20% of the consolidated total assets and revenues, respectively, as of and for the year ended July 1, 2023.

We are in the process of integrating the acquired businesses into our existing operations and evaluating the internal controls over financial reporting of the acquired businesses.

We believe that we have taken necessary steps to monitor and maintain appropriate internal control over financial reporting during this integration.

As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting of two acquisitions (NeoPhotonics Corporation and IPG Photonics’ telecom transmission product lines) that were completed during the year ended July 1, 2023, which constitute in aggregate 22% and 20% of consolidated total assets and revenues, respectively, as of and for the year ended July 1, 2023.

Accordingly, our audit did not include the internal control over financial reporting of two acquisitions.

August 23, 2023

August 24, 2022

*Securities Trading Plans of Directors and Executive Officers*

During our last fiscal quarter, no director or officer, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408.

None.

The SEC allows us to include information required in this [removed: report] [added: Annual Report] by referring to other documents or reports we have already filed or will soon be filing.

This is called “incorporation by reference.” We intend to file our definitive proxy statement for our [removed: 2022] [added: 2023] annual meeting of stockholders (the “Proxy Statement”) pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this [removed: report,] [added: Annual Report,] and certain information to be contained therein is incorporated in this [removed: report] [added: Annual Report] by reference.

The information required for this Item [removed: is] [added: will be] set forth in the Proxy Statement and [added: is] incorporated herein by reference.

The information required for this Item [removed: is] [added: will be] set forth in the Proxy Statement and [added: is] incorporated herein by reference.

The information required for this Item [removed: is] [added: will be] set forth in the Proxy Statement and [added: is] incorporated herein by reference.

The information required for this Item [removed: is] [added: will be] set forth in the Proxy Statement and [added: is] incorporated herein by reference.

The information required for this Item [removed: is] [added: will be] set forth in the Proxy Statement and [added: is] incorporated herein by reference.

The financial statements filed as part of this [removed: report] [added: Annual Report] are listed in the [removed: “Index to Financial Statements”] [added: section titled “Financial Statements and Supplementary Data”] under Part II, Item [removed: 7] [added: 8] of this [removed: report.][added: Annual Report.]

| [Report of Independent Registered Public Accounting Firm (PCAOB ID [removed: No.](#iea3219ff6aac4df3add24b5ea3f3a178_151) 34[)](#iea3219ff6aac4df3add24b5ea3f3a178_151)] [added: No.](#ic267110da33842429c6bb39adb83d35b_145) 34[)](#ic267110da33842429c6bb39adb83d35b_145)] | | | [removed: [66](#iea3219ff6aac4df3add24b5ea3f3a178_151)] [added: [65](#ic267110da33842429c6bb39adb83d35b_145)] | | |

| [Consolidated Statements of Operations—Years [removed: Ended July 2, 2022, July] [added: Ended](#ic267110da33842429c6bb39adb83d35b_148) [July 1, 2023,](#ic267110da33842429c6bb39adb83d35b_148) [July](#ic267110da33842429c6bb39adb83d35b_148) [2](#ic267110da33842429c6bb39adb83d35b_148)[, 2022](#ic267110da33842429c6bb39adb83d35b_148) [](#ic267110da33842429c6bb39adb83d35b_148)[and](#ic267110da33842429c6bb39adb83d35b_148) [July] 3, [removed: 2021, and June 27, 2020](#iea3219ff6aac4df3add24b5ea3f3a178_154)] [added: 2021](#ic267110da33842429c6bb39adb83d35b_148)] | | | [removed: [68](#iea3219ff6aac4df3add24b5ea3f3a178_154)] [added: [68](#ic267110da33842429c6bb39adb83d35b_148)] | | |

| [Consolidated Statements of Comprehensive Income [removed: —Years] [added: (Loss)—Years] Ended July [added: 1, 2023, July] 2, [removed: 2022,] [added: 2022 and] July 3, [removed: 2021 and June 27, 2020](#iea3219ff6aac4df3add24b5ea3f3a178_157)] [added: 2021](#ic267110da33842429c6bb39adb83d35b_151)] | | | [removed: [69](#iea3219ff6aac4df3add24b5ea3f3a178_157)] [added: [69](#ic267110da33842429c6bb39adb83d35b_151)] | | |

| [Consolidated Balance [removed: Sheets—July] [added: Sheets—](#ic267110da33842429c6bb39adb83d35b_154)[July 1, 2023](#ic267110da33842429c6bb39adb83d35b_154) [and](#ic267110da33842429c6bb39adb83d35b_154) [July] 2, [removed: 2022 and July 3, 2021](#iea3219ff6aac4df3add24b5ea3f3a178_160)] [added: 2022](#ic267110da33842429c6bb39adb83d35b_154)] | | | [removed: [70](#iea3219ff6aac4df3add24b5ea3f3a178_160)] [added: [70](#ic267110da33842429c6bb39adb83d35b_154)] | | |

| [Consolidated Statements of Cash Flows—Years [removed: Ended July] [added: Ended](#ic267110da33842429c6bb39adb83d35b_157) [July 1, 2023,](#ic267110da33842429c6bb39adb83d35b_157) [July] 2, [removed: 2022, July] [added: 202](#ic267110da33842429c6bb39adb83d35b_157)[2](#ic267110da33842429c6bb39adb83d35b_157) [and](#ic267110da33842429c6bb39adb83d35b_157) [July] 3, [removed: 2021, and June 27, 2020](#iea3219ff6aac4df3add24b5ea3f3a178_163)] [added: 2021](#ic267110da33842429c6bb39adb83d35b_157)] | | | [removed: [71](#iea3219ff6aac4df3add24b5ea3f3a178_163)] [added: [71](#ic267110da33842429c6bb39adb83d35b_157)] | | |

| [Consolidated Statements of Stockholders’ Equity—Years Ended July [added: 1, 2023, July] 2, [removed: 2022,] [added: 2022 and] July 3, [removed: 2021, and June 27, 2020](#iea3219ff6aac4df3add24b5ea3f3a178_166)] [added: 2021](#ic267110da33842429c6bb39adb83d35b_160)] | | | [removed: [73](#iea3219ff6aac4df3add24b5ea3f3a178_166)] [added: [73](#ic267110da33842429c6bb39adb83d35b_160)] | | |

| [Notes to Consolidated Financial [removed: Statements](#iea3219ff6aac4df3add24b5ea3f3a178_178)] [added: Statements](#ic267110da33842429c6bb39adb83d35b_172)] | | | [removed: [74](#iea3219ff6aac4df3add24b5ea3f3a178_178)] [added: [74](#ic267110da33842429c6bb39adb83d35b_172)] | | |

| | | | Balance at beginning of [removed: Period] [added: period] | | | | | | | | | | | | Increase (decrease) in Consolidated Statements of Operations | | | | | | [removed: Write offs] [added: Write-offs] and other adjustments | | | | | | | | | | | | Balance at end of period | | |

| 4.2 | | | | | | [Form of 0.250% Convertible Senior Notes due 2024 (included in Exhibit [removed: 4.2)](http://www.sec.gov/Archives/edgar/data/1633978/000119312517074740/d337254dex41.htm)] [added: 4.](http://www.sec.gov/Archives/edgar/data/1633978/000119312517074740/d337254dex41.htm)[1](http://www.sec.gov/Archives/edgar/data/1633978/000119312517074740/d337254dex41.htm)[)](http://www.sec.gov/Archives/edgar/data/1633978/000119312517074740/d337254dex41.htm)] | | | | | | 8-K | | | | | | 4.2 | | | | | | 3/9/2017 | | | | | | | | |

| [removed: 10.4] [added: 10.4*] | | | | | | [2015 Equity Incentive Plan as amended](http://www.sec.gov/Archives/edgar/data/1633978/000162828016021143/exhibit102110916.htm) | | | | | | 8-K | | | | | | 10.2 | | | | | | 11/9/2016 | | | | | | | | |

| [removed: 10.5] [added: 10.5*] | | | | | | [2015 Employee Stock Purchase Plan](http://www.sec.gov/Archives/edgar/data/1633978/000119312515266929/d91067dex992.htm) | | | | | | S-8 | | | | | | 99.2 | | | | | | 7/29/2015 | | | | | | | | |

| [removed: 10.7] [added: 10.7*] | | | | | | [Change in Control and Severance Benefits Plan, effective May 8, 2018](http://www.sec.gov/Archives/edgar/data/1633978/000163397818000108/lite-q418xex106.htm) | | | | | | 10-K | | | | | | 10.6 | | | | | | 8/28/2018 | | | | | | | | |

| [removed: 10.14] [added: 10.15] | | | | | | [Purchase Agreement, dated as of [removed: March 3, 2022,] [added: June 13, 2023,] between Lumentum Holdings Inc. and Goldman Sachs & Co. [removed: LLC and BofA Securities, Inc.](https://www.sec.gov/Archives/edgar/data/1633978/000119312522069350/d287629dex101.htm)] [added: LLC, as representative of the Initial Purchasers named in Schedule I thereto.](https://www.sec.gov/Archives/edgar/data/1633978/000119312523168966/d317553dex101.htm)] | | | | | | 8-K | | | | | | 10.1 | | | | | | [removed: 3/8/2022] [added: 6/16/2023] | | | | | | | | |

| 21.1 | | | | | | [Subsidiaries of Lumentum Holdings [removed: Inc.](https://www.sec.gov/Archives/edgar/data/1633978/000162828022023617/liteq422-ex211.htm)] [added: Inc.](https://www.sec.gov/Archives/edgar/data/1633978/000162828023030374/liteq423-ex211.htm)] | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 23.1 | | | | | | [Consent of Independent Registered Public Accounting Firm (Deloitte & Touche [removed: LLP)](https://www.sec.gov/Archives/edgar/data/1633978/000162828022023617/liteq422-ex231.htm)] [added: LLP)](https://www.sec.gov/Archives/edgar/data/1633978/000162828023030374/liteq423-ex231.htm)] | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 31.1 | | | | | | [Certification of the Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1633978/000162828022023617/liteq422-ex311.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1633978/000162828023030374/liteq423-ex311.htm)] | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 31.2 | | | | | | [Certification of the Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1633978/000162828022023617/liteq422-ex312.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1633978/000162828023030374/liteq423-ex312.htm)] | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 32.1† | | | | | | [Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1633978/000162828022023617/liteq422-ex321.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1633978/000162828023030374/liteq423-ex321.htm)] | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 32.2† | | | | | | [Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1633978/000162828022023617/liteq422-ex322.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1633978/000162828023030374/liteq423-ex322.htm)] | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 101 | | | | | | The following financial information from Lumentum Holdings Inc.’s Annual Report on Form 10-K for the fiscal year ended July [removed: 2, 2022] [added: 1, 2023] formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations for the fiscal years ended July [added: 1, 2023, July] 2, [removed: 2022,] [added: 2022 and] July 3, [removed: 2021, and June 27, 2020;] [added: 2021;] (ii) Consolidated Statements of Comprehensive Income for the fiscal years ended July [added: 1, 2023, July] 2, [removed: 2022,] [added: 2022 and] July 3, [removed: 2021, and June 27, 2020;] [added: 2021;] (iii) Consolidated Balance Sheets as of July [removed: 2, 2022] [added: 1, 2023] and July [removed: 3, 2021;] [added: 2, 2022;] (iv) Consolidated Statements of Cash Flows for the fiscal years ended July [added: 1, 2023, July] 2, [removed: 2022,] [added: 2022 and] July 3, [removed: 2021, and June 27, 2020;] [added: 2021;] (v) Consolidated Statements of Stockholders’ Equity for the fiscal years ended July [added: 1, 2023, July] 2, [removed: 2022,] [added: 2022 and] July 3, [removed: 2021, and June 27, 2020;] [added: 2021;] and (vi) Notes to the Consolidated Financial Statements | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 104 | | | | | | The cover page from Lumentum Holdings Inc.’s Annual Report on Form 10-K for the fiscal year ended July [removed: 2, 2022,] [added: 1, 2023,] formatted in Inline XBRL (included as Exhibit 101). | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| Fiscal year ended July 1, 2023 | | | $ | — | | | | | | | | | | | $ | — | | | | | $ | — | | | | | | | | | | | $ | — | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Fiscal year ended July 1, 2023 | | | | | | $ | 263.1 | | | | | $ | 42.7 | | | | | $ | (2.4) | | | | | $ | 303.4 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 4.8 | | | | | | [Indenture, dated June 16, 2023, between Lumentum Holdings Inc. and U.S. Bank Trust Company, National Association.](https://www.sec.gov/Archives/edgar/data/1633978/000119312523168966/d317553dex41.htm) | | | | | | 8-K | | | | | | 4.1 | | | | | | 6/16/2023 | | | | | | | | |

| 4.9 | | | | | | [Form of 1.50% Convertible Senior Note due 2029 (included in Exhibit 4.8).](https://www.sec.gov/Archives/edgar/data/1633978/000119312523168966/d317553dex41.htm) | | | | | | 8-K | | | | | | 4.2 | | | | | | 6/16/2023 | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 10.13* | | | | | | [Global Performance Unit Award Agreement](https://www.sec.gov/Archives/edgar/data/1633978/000162828023016653/lite-globalpsuawardagreeme.htm) | | | | | | 10-Q | | | | | | 10.1 | | | | | | 5/9/2023 | | | | | | | | |

| 10.14* | | | | | | [Global Restricted Stock Unit Award Agreement](https://www.sec.gov/Archives/edgar/data/1633978/000162828023016653/lite-globalrsuawardagreeme.htm) | | | | | | 10-Q | | | | | | 10.2 | | | | | | 5/9/2023 | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Fiscal year ended June 27, 2020 | | | $ | 4.5 | | | | | | | | | | | $ | 0.1 | | | | | $ | (2.8) | | | | | | | | | | | $ | 1.8 | |

| Fiscal year ended June 27, 2020 (3) | | | | | | $ | 190.3 | | | | | $ | 12.7 | | | | | $ | (2.2) | | | | | $ | 200.8 | |

(3) Certain prior period amounts have been reclassified to conform to current year presentation on a jurisdiction by jurisdiction basis.

| 10.12 | | | | | | [Commitment Letter, dated as of January 18, 2021, by and among Lumentum Holdings Inc., Deutsche Bank Securities Inc. and Deutsche Bank AG New York Branch.](https://www.sec.gov/Archives/edgar/data/1633978/000110465921005024/tm213409d1_ex10-1.htm) | | | | | | 8-K | | | | | | 10.1 | | | | | | 1/19/2021 | | | | | | | | |

| 10.13 | | | | | | [Amended and Restated Commitment Letter, dated as of March 9, 2021, by and among Lumentum Holdings Inc., Deutsche Bank Securities Inc. and Deutsche Bank AG New York Branch.](https://www.sec.gov/Archives/edgar/data/1633978/000119312521075438/d25927dex101.htm) | | | | | | 8-K | | | | | | 10.1 | | | | | | 3/10/2021 | | | | | | | | |

| Date: | | | August [removed: 24, 2022] [added: 23, 2023] | | | LUMENTUM HOLDINGS INC. | | | | | |

| /s/ ALAN LOWE | | | | | | President, Chief Executive Officer and Director (principal executive officer) | | | | | | August [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ WAJID ALI | | | | | | Executive Vice President, Chief Financial Officer (principal financial officer) | | | | | | August [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ MATTHEW SEPE | | | | | | Chief Accounting Officer (principal accounting officer) | | | | | | August [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ HAROLD COVERT | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ JULIE JOHNSON | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ PENELOPE HERSCHER | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ BRIAN LILLIE | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ IAN SMALL | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ JANET WONG | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ ISAAC HARRIS | | | | | | Director | | | | | | August [removed: 24, 2022] [added: 23, 2023] | | |

| | | | | | | | | | | | | | | |

| /s/ PAMELA FLETCHER | | | | | | Director | | | | | | August 23, 2023 | | |

| Pamela Fletcher | | | | | | | | | | | | | | |