COVER
COVER - shares | 6 Months Ended | |
Dec. 31, 2022 | Feb. 02, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-36861 | |
Entity Registrant Name | Lumentum Holdings Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-3108385 | |
Entity Address, Address Line One | 1001 Ridder Park Drive | |
Entity Address, City or Town | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95131 | |
City Area Code | 408 | |
Local Phone Number | 546-5483 | |
Title of 12(b) Security | Common Stock, par value of $0.001 per share | |
Trading Symbol | LITE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 68,500,000 | |
Entity Central Index Key | 0001633978 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --07-01 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Income Statement [Abstract] | ||||
Net revenue | $ 506 | $ 446.7 | $ 1,012.8 | $ 895.1 |
Cost of sales | 315.1 | 223.3 | 597.7 | 423.7 |
Amortization of acquired developed intangibles | 24.7 | 15.9 | 47.7 | 31.7 |
Gross profit | 166.2 | 207.5 | 367.4 | 439.7 |
Operating expenses: | ||||
Research and development | 75.8 | 53.2 | 148.5 | 107.3 |
Selling, general and administrative | 98.4 | 69 | 204.1 | 132.3 |
Restructuring and related charges | 13.9 | 0.1 | 23.2 | (1) |
Total operating expenses | 188.1 | 122.3 | 375.8 | 238.6 |
Income (loss) from operations | (21.9) | 85.2 | (8.4) | 201.1 |
Interest expense | (8.9) | (17.1) | (17.4) | (34) |
Other income, net | 3.7 | 1 | 17.5 | 1.6 |
Income (loss) before income taxes | (27.1) | 69.1 | (8.3) | 168.7 |
Provision for income taxes | 4.6 | 12.4 | 23.8 | 30.5 |
Net income (loss) | $ (31.7) | $ 56.7 | $ (32.1) | $ 138.2 |
Net income (loss) per share: | ||||
Basic (in usd per share) | $ (0.46) | $ 0.78 | $ (0.47) | $ 1.91 |
Diluted (in usd per share) | $ (0.46) | $ 0.75 | $ (0.47) | $ 1.83 |
Shares used to compute net income (loss) per share: | ||||
Basic (in shares) | 68.3 | 72.3 | 68.2 | 72.5 |
Diluted (in shares) | 68.3 | 75.3 | 68.2 | 75.4 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (31.7) | $ 56.7 | $ (32.1) | $ 138.2 |
Other comprehensive income (loss), net of tax: | ||||
Net change in unrealized gain (loss) on available-for-sale securities | 3.6 | (2.3) | 3 | (2) |
Other comprehensive income (loss), net of tax | 3.6 | (2.3) | 3 | (2) |
Comprehensive income (loss), net of tax | $ (28.1) | $ 54.4 | $ (29.1) | $ 136.2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2022 | Jul. 02, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 592.1 | $ 1,290.2 |
Short-term investments | 1,088.3 | 1,258.8 |
Accounts receivable, net | 330.5 | 262 |
Inventories | 366.9 | 250.1 |
Prepayments and other current assets | 114.8 | 78.1 |
Total current assets | 2,492.6 | 3,139.2 |
Property, plant and equipment, net | 487.7 | 360.5 |
Operating lease right-of-use assets, net | 84.9 | 73.6 |
Goodwill | 698.2 | 368.9 |
Other intangible assets, net | 539.9 | 155.7 |
Deferred tax asset | 100.1 | 27 |
Other non-current assets | 14.7 | 37.3 |
Total assets | 4,418.1 | 4,162.2 |
Current liabilities: | ||
Accounts payable | 205.6 | 156.7 |
Accrued payroll and related expenses | 60.7 | 54.6 |
Accrued expenses | 62.1 | 44.7 |
Short-term debt | 420.7 | 409.9 |
Operating lease liabilities, current | 14 | 11.2 |
Other current liabilities | 51.2 | 39.4 |
Total current liabilities | 814.3 | 716.5 |
Long-term debt | 1,900.3 | 1,466.1 |
Operating lease liabilities, non-current | 57 | 48.8 |
Deferred tax liability | 25.8 | 12.9 |
Other non-current liabilities | 77.1 | 42.9 |
Total liabilities | 2,874.5 | 2,287.2 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value, 990 authorized shares, 68.4 and 68.0 shares issued and outstanding as of December 31, 2022 and July 2, 2022, respectively | 0.1 | 0.1 |
Additional paid-in capital | 1,641.4 | 2,003.6 |
Accumulated deficit | (101.3) | (129.1) |
Accumulated other comprehensive income | 3.4 | 0.4 |
Total stockholders’ equity | 1,543.6 | 1,875 |
Total liabilities and stockholders’ equity | $ 4,418.1 | $ 4,162.2 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Jul. 02, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock, authorized shares (in shares) | 990,000,000 | 990,000,000 |
Common stock, shares issued (in shares) | 68,400,000 | 68,000,000 |
Common stock, shares outstanding (in shares) | 68,400,000 | 68,000,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-In Capital | Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings (Accumulated Deficit) | Retained Earnings (Accumulated Deficit) Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) |
Balance at the beginning of the period at Jul. 03, 2021 | $ 1,972.8 | $ 0.1 | $ 1,743.6 | $ 220.9 | $ 8.2 | |||
Balance at the beginning of period (in shares) at Jul. 03, 2021 | 73,000,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 81.5 | 81.5 | ||||||
Other comprehensive income (loss) | 0.3 | 0.3 | ||||||
Issuance of shares in connection with vesting of restricted stock units and performance stock units (in shares) | 600,000 | |||||||
Withholding taxes related to net share settlement of restricted stock units | (16.6) | (16.6) | ||||||
Withholding taxes related to net share settlement of restricted stock units (in shares) | (200,000) | |||||||
Repurchases of common stock | (91.7) | (91.7) | ||||||
Repurchases of common stock (in shares) | (1,100,000) | |||||||
Stock-based compensation | 25.1 | 25.1 | ||||||
Balance at the end of the period at Oct. 02, 2021 | 1,971.4 | $ 0.1 | 1,752.1 | 210.7 | 8.5 | |||
Balance at the end of period (in shares) at Oct. 02, 2021 | 72,300,000 | |||||||
Balance at the beginning of the period at Jul. 03, 2021 | 1,972.8 | $ 0.1 | 1,743.6 | 220.9 | 8.2 | |||
Balance at the beginning of period (in shares) at Jul. 03, 2021 | 73,000,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 138.2 | |||||||
Other comprehensive income (loss) | (2) | |||||||
Balance at the end of the period at Jan. 01, 2022 | 2,021.9 | $ 0.1 | 1,778.1 | 237.5 | 6.2 | |||
Balance at the end of period (in shares) at Jan. 01, 2022 | 72,200,000 | |||||||
Balance at the beginning of the period at Jul. 03, 2021 | 1,972.8 | $ 0.1 | 1,743.6 | 220.9 | 8.2 | |||
Balance at the beginning of period (in shares) at Jul. 03, 2021 | 73,000,000 | |||||||
Balance at the end of the period at Jul. 02, 2022 | $ 1,875 | $ (340.9) | $ 0.1 | 2,003.6 | $ (426.5) | (129.1) | $ 85.6 | 0.4 |
Balance at the end of period (in shares) at Jul. 02, 2022 | 68,000,000 | 68,000,000 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2020-06 [Member] | |||||||
Balance at the beginning of the period at Oct. 02, 2021 | $ 1,971.4 | $ 0.1 | 1,752.1 | 210.7 | 8.5 | |||
Balance at the beginning of period (in shares) at Oct. 02, 2021 | 72,300,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | 56.7 | 56.7 | ||||||
Other comprehensive income (loss) | (2.3) | (2.3) | ||||||
Issuance of shares in connection with vesting of restricted stock units and performance stock units (in shares) | 200,000 | |||||||
Withholding taxes related to net share settlement of restricted stock units | (8.3) | (8.3) | ||||||
Withholding taxes related to net share settlement of restricted stock units (in shares) | (100,000) | |||||||
ESPP shares issued (in shares) | 100,000 | |||||||
ESPP shares issued | 6.6 | 6.6 | ||||||
Repurchases of common stock | (29.9) | (29.9) | ||||||
Repurchases of common stock (in shares) | (300,000) | |||||||
Stock-based compensation | 27.7 | 27.7 | ||||||
Balance at the end of the period at Jan. 01, 2022 | 2,021.9 | $ 0.1 | 1,778.1 | 237.5 | 6.2 | |||
Balance at the end of period (in shares) at Jan. 01, 2022 | 72,200,000 | |||||||
Balance at the beginning of the period at Jul. 02, 2022 | $ 1,875 | (340.9) | $ 0.1 | 2,003.6 | (426.5) | (129.1) | 85.6 | 0.4 |
Balance at the beginning of period (in shares) at Jul. 02, 2022 | 68,000,000 | 68,000,000 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | $ (0.4) | (0.4) | ||||||
Other comprehensive income (loss) | (0.6) | (0.6) | ||||||
Issuance of shares in connection with vesting of restricted stock units and performance stock units (in shares) | 700,000 | |||||||
Withholding taxes related to net share settlement of restricted stock units | (22.4) | (22.4) | ||||||
Withholding taxes related to net share settlement of restricted stock units (in shares) | (200,000) | |||||||
Repurchases of common stock | (25.7) | (25.7) | ||||||
Repurchases of common stock (in shares) | (300,000) | |||||||
Stock-based compensation | 41.4 | 41.4 | ||||||
Balance at the end of the period at Oct. 01, 2022 | 1,526.4 | $ 0.1 | 1,596.1 | (69.6) | (0.2) | |||
Balance at the end of period (in shares) at Oct. 01, 2022 | 68,200,000 | |||||||
Balance at the beginning of the period at Jul. 02, 2022 | $ 1,875 | $ (340.9) | $ 0.1 | 2,003.6 | $ (426.5) | (129.1) | $ 85.6 | 0.4 |
Balance at the beginning of period (in shares) at Jul. 02, 2022 | 68,000,000 | 68,000,000 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | $ (32.1) | |||||||
Other comprehensive income (loss) | $ 3 | |||||||
Repurchases of common stock (in shares) | (300,000) | |||||||
Balance at the end of the period at Dec. 31, 2022 | $ 1,543.6 | $ 0.1 | 1,641.4 | (101.3) | 3.4 | |||
Balance at the end of period (in shares) at Dec. 31, 2022 | 68,400,000 | 68,400,000 | ||||||
Balance at the beginning of the period at Oct. 01, 2022 | $ 1,526.4 | $ 0.1 | 1,596.1 | (69.6) | (0.2) | |||
Balance at the beginning of period (in shares) at Oct. 01, 2022 | 68,200,000 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income (loss) | (31.7) | (31.7) | ||||||
Other comprehensive income (loss) | 3.6 | 3.6 | ||||||
Issuance of shares in connection with vesting of restricted stock units and performance stock units (in shares) | 200,000 | |||||||
Withholding taxes related to net share settlement of restricted stock units | (4.3) | (4.3) | ||||||
Withholding taxes related to net share settlement of restricted stock units (in shares) | (100,000) | |||||||
ESPP shares issued (in shares) | 100,000 | |||||||
ESPP shares issued | 5.7 | 5.7 | ||||||
Stock-based compensation | 43.9 | 43.9 | ||||||
Balance at the end of the period at Dec. 31, 2022 | $ 1,543.6 | $ 0.1 | $ 1,641.4 | $ (101.3) | $ 3.4 | |||
Balance at the end of period (in shares) at Dec. 31, 2022 | 68,400,000 | 68,400,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Dec. 31, 2022 | Jan. 01, 2022 | |
OPERATING ACTIVITIES: | ||
Net income (loss) | $ (32.1) | $ 138.2 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense | 50.9 | 41 |
Stock-based compensation | 83.2 | 52.1 |
Amortization of acquired intangibles | 68.3 | 42.9 |
(Gain) loss on sales and dispositions of property, plant and equipment | 7.2 | (5) |
Amortization of debt discount and debt issuance costs | 11.9 | 30.8 |
Amortization of inventory fair value adjustment in connection with acquisition | 14.2 | 0 |
Other non-cash items | 1 | 6.6 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1.5) | (26.4) |
Inventories | (36.4) | (11) |
Operating lease right-of-use assets, net | 7.9 | (7.7) |
Prepayments and other current and non-currents assets | (13.9) | (7.3) |
Income taxes, net | (14.8) | (5.4) |
Accounts payable | (45) | 4.8 |
Accrued payroll and related expenses | (15) | (4) |
Operating lease liabilities | (7.3) | 8.7 |
Accrued expenses and other current and non-current liabilities | 37.1 | 10.1 |
Net cash provided by operating activities | 115.7 | 268.4 |
INVESTING ACTIVITIES: | ||
Payments for acquisition of property, plant and equipment | (62.8) | (44) |
Acquisition of businesses, net of cash acquired | (861.6) | 0 |
Purchases of short-term investments | (327.8) | (648) |
Proceeds from maturities and sales of short-term investments | 501 | 340.2 |
Proceeds from the sales of property, plant and equipment | 0.1 | 6 |
Net cash used in investing activities | (751.1) | (345.8) |
FINANCING ACTIVITIES: | ||
Repurchase of common stock | (35.8) | (126.6) |
Payment of withholding taxes related to net share settlement of restricted stock units | (26.7) | (24.9) |
Proceeds from employee stock plans | 5.7 | 6.6 |
Repayment of term loan | (5.9) | 0 |
Net cash used in financing activities | (62.7) | (144.9) |
Decrease in cash and cash equivalents | (698.1) | (222.3) |
Cash and cash equivalents at beginning of period | 1,290.2 | 774.3 |
Cash and cash equivalents at end of period | 592.1 | 552 |
Supplemental disclosure of cash flow information: | ||
Cash paid for taxes | 38.5 | 36 |
Cash paid for interest | 5.4 | 3.2 |
Supplemental disclosure of non-cash transactions: | ||
Unpaid property, plant and equipment in accounts payable and accrued expenses | 16.4 | 7.1 |
Settlement of loan to NeoPhotonics | 50 | 0 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 19.4 | $ 12.4 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Note 1. Description of Business and Summary of Significant Accounting Policies Description of Business Lumentum Holdings Inc. (“we,” “us,” “our”, “Lumentum” or the “Company”) is an industry-leading provider of optical and photonic products 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 imaging and sensing for consumer electronics and diode light sources for a variety of consumer and industrial applications. The majority of our customers have historically been, and are currently, original equipment manufacturers (“OEMs”) that incorporate our products into their 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 communications service providers, hyperscale cloud operators, and enterprises with their own networks. Similarly, many of our Lasers products customers incorporate our products into tools they produce, which are used for manufacturing processes by their customers. For 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. Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, actual results may be different from the estimates. Operating results for the quarter ended December 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending July 1, 2023. In the opinion of the Company’s management, the information presented herein reflects all normal and recurring adjustments necessary for a fair presentation of our results of operations, financial position, stockholders’ equity and cash flows. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are inventory valuation, revenue recognition, income taxes, goodwill and business combinations. 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 the COVID-19 pandemic, global supply chain constraints, inflation, and a dynamic demand environment. Additionally, instability in the global credit markets, the impact of uncertainty regarding global central bank monetary policy, capital expenditure reductions, unemployment and other labor issues, decline in stock markets, the instability in the geopolitical environment in many parts of the world and the current economic challenges in China continue to put pressure on global economic conditions and our business and operating results. While the impact of the COVID-19 pandemic is lessening, the duration and severity of the impact of the pandemic on our business and results of operations in future periods remain uncertain. The extent of the impact of COVID-19 on our operational and financial performance will depend on certain developments, including but not limited to the duration and spread of the pandemic and its variants, implementation and duration of local, state and federal issued public health orders in each jurisdiction where we operate or in which our customers and suppliers operate, impact on our customers and our sales cycles, impact on our supply chain and manufacturing partners, impact on our employees and impact on regional and worldwide economies and financial markets in general, all of which are uncertain and not predictable. We assessed the potential impact that this pandemic has on our estimates as of December 31, 2022 and determined that there were no material impacts. 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. As of December 31, 2022, our inventory balance includes $18.0 million of incremental supply and procurement costs. We are also continuously monitoring the current developments in the ongoing war between Russia and Ukraine including the related export controls and resulting sanctions imposed on Russia by the U.S. and other countries. Additional factors such as increased inflation, escalating energy costs, constrained raw material availability, and related cost increases could impact the global economy. Although the global implications of the Russian/Ukraine war are difficult to predict at this time, we do not presently foresee direct material adverse effects upon our business. Business Combinations On August 3, 2022, we completed a merger with NeoPhotonics Corporation (“NeoPhotonics”). Our condensed consolidated financial statements include the operating results of NeoPhotonics for the period from the date of the closing of the merger through December 31, 2022. We have applied the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations to account for this transactio n. Refer to “Note 4. Business Combinations” for further discussion of the merger. On August 15, 2022, we completed a transaction to acquire IPG Photonics’ telecom transmission product lines. Our condensed consolidated financial statements include the operating results of this business unit for the period from the date of the acquisition through December 31, 2022. We have applied the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations to account for this transaction . Refer to “Note 4. Business Combinations” for further discussion of this acquisition. Fiscal Years We utilize a 52-53 week fiscal year ending on the Saturday closest to June 30th. Every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the third quarter, making such quarter consist of 14 weeks. Our fiscal 2023 is a 52-week year ending on July 1, 2023, with the quarter ended December 31, 2022 being a 13-week quarterly period. Our fiscal 2022 was a 52-week year that ended on July 2, 2022, with the quarter ended January 1, 2022 being a 13-week quarterly period. Principles of Consolidation These interim unaudited condensed consolidated financial statements include the accounts of Lumentum Holdings Inc. and its wholly-owned subsidiaries. All inter-company transactions and balances are eliminated in consolidation. 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 condensed consolidated financial statements. Accounting Policies The condensed consolidated financial statements and accompanying related notes should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended July 2, 2022. Except for the accounting policies for convertible instruments as a result of our adoption of Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, described in “Note 2. Recently Issued Accounting Pronouncements”, there have been no significant changes to our accounting policies during |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 6 Months Ended |
Dec. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Pronouncements | Note 2. Recently Issued Accounting Pronouncements Accounting Pronouncements Recently Adopted In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805)—Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers . This ASU is expected to improve comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. The new guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. We early adopted the new standard in the first quarter of fiscal 2023 in connection with the merger with NeoPhotonics. There was no material impact to our condensed consolidated financial statements as of and for the three and six months period ended December 31, 2022. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible instruments by removing the separation models for (i) convertible debt with a cash conversion feature and (ii) convertible instruments with a beneficial conversion feature. As a result, a convertible debt instrument is accounted for as a single liability measured at its amortized cost. ASU 2020-06 also requires the application of the if-converted method for calculating diluted earnings per share. We adopted the standard as of July 3, 2022, using the modified retrospective approach. Upon adoption, our 2026 Notes and 2028 Notes were accounted for as a single liability measured at amortized cost, resulting in: (i) an increase to the convertible notes liability balance of $433.0 million to reflect the full principal amount of the convertible notes outstanding, net of issuance costs; (ii) a reduction to additional paid-in capital, net of estimated income tax effects, of $426.5 million, to remove the equity component separately recorded for the conversion features associated with the convertible notes; (iii) an increase to deferred tax assets, net of $92.1 million; and (iv) a cumulative-effect adjustment of $85.6 million, net of estimated income tax effects, to decrease the accumulated deficit. In addition, the adoption requires the use of the if-converted method for all convertible notes in the diluted net income per share calculation and the inclusion of the effect of potential share settlement of the convertible notes, if the effect is more dilutive. There wa s no impact to diluted earnings per share for the three and six months ended December 31, 2022, as the inclusion of potential shares of common stock related to the convertible notes was anti-dilutive. Ref er to “Note 9. Debt” for further information. The following table sets forth the impact upon adoption of ASU 2020-06 as of July 3, 2022 ( in millions ): Short Term Debt - 2024 Notes Long Term Debt - 2026 Notes Long Term Debt - 2028 Notes Additional Paid-In Capital Accumulated Deficit Deferred Tax Asset (Liability), net Balances pre-adoption of ASC 2020-06 $ 409.9 $ 831.4 $ 634.7 $ 2,003.6 $ 129.1 $ 12.9 Reclassify amounts from equity to debt — 312.9 229.3 (542.2) — — Adjustment for interest accretion — (99.5) (9.7) — (109.2) — Tax effect — — — 115.7 23.6 92.1 Balances upon adoption of ASC 2020-06 $ 409.9 $ 1,044.8 $ 854.3 $ 1,577.1 $ 43.5 $ 105.0 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 3. Earnings Per Share The following table sets forth the computation of basic and diluted net income (loss) per share ( in millions, except per share data ): Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Numerator: Net income (loss) - basic and diluted $ (31.7) $ 56.7 $ (32.1) $ 138.2 Denominator: Weighted average common shares outstanding - basic 68.3 72.3 68.2 72.5 Effect of dilutive securities from stock-based benefit plans — 0.5 — 0.6 Shares issuable assuming conversion of the convertible notes — 2.5 — 2.3 Weighted average common shares outstanding - diluted 68.3 75.3 68.2 75.4 Net income (loss) per share: Basic $ (0.46) $ 0.78 $ (0.47) $ 1.91 Diluted $ (0.46) $ 0.75 $ (0.47) $ 1.83 Shares from stock-based benefit plans and shares issuable assuming conversion of our convertible notes are anti-dilutive for the three and six months ended December 31, 2022 and are therefore excluded from the calculation of diluted net income (loss) per share as the Company had a net loss for both periods. Anti-dilutive shares excluded from the calculation of diluted net income (loss) per share for the three months ended December 31, 2022 mainly include 24.5 million shares related to convertible notes, 3.8 million shares issuable under restricted stock units (“RSUs”) and performance stock units (“PSUs”), and 0.2 million shares issuable under the Employee Stock Purchase Plan (the “2015 Purchase Plan”). Average anti-dilutive shares excluded from the calculation of diluted net income (loss) per share for the six months ended December 31, 2022 include 24.5 million shares related to convertible notes, 3.9 million shares issuable under RSUs and PSUs, and 0.1 million shares issuable under the 2015 Purchase Plan. Refer to “Note 13. Equity.” As a result of our adoption of ASU 2020-06 in the first quarter of fiscal 2023, potentially dilutive common shares issuable upon conversion of our outstanding 2024 Notes, 2026 Notes and 2028 Notes (collectively referred to as the “convertible notes”) are determined using the if-converted method. For periods prior to the adoption of ASU 2020-06, which includes the three and six months ended January 1, 2022, our potentially dilutive common shares issuable upon conversion of our outstanding convertible notes are determined using the treasury stock method. Anti-dilutive shares excluded from the calculation of diluted earnings per share were less than 0.1 million and 0.4 million for the three and six months ended January 1, 2022 , respectively . |
Business Combinations
Business Combinations | 6 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Note 4. Business Combinations NeoPhotonics Merger On November 3, 2021, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with NeoPhotonics and Neptune Merger Sub, Inc. On August 3, 2022 (the “Closing date”), we completed the acquisition of NeoPhotonics through the consummation of the merger and, accordingly, we acquired all of the issued and outstanding common stock of NeoPhotonics. The addition of NeoPhotonics expands our opportunity in some of the fastest growing markets for optical components used in cloud and telecom network infrastructure. We expect the integrated company to be 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. We have applied the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations , with respect to the fair value of purchase price consideration and the identifiable assets and liabilities of NeoPhotonics, which have been measured at estimated fair value as of the Closing date. The following tables summarize the total purchase price consideration ( in millions ): Fair Value Cash consideration for outstanding NeoPhotonics common stock (1) $ 867.3 Settlement of pre-existing relationship (loan to NeoPhotonics) (2) 50.0 Stock-based compensation (3) 17.1 Total purchase price consideration $ 934.4 (1) Under the terms of the Merger Agreement, NeoPhotonics stockholders received $16.00 per share for each of the 54.2 million NeoPhotonics common stock outstanding at the Closing date. As a result, we paid $867.3 million of cash consideration to shareholders of NeoPhotonics on the Closing date. (2) As contemplated by the Merger Agreement, on January 14, 2022, Lumentum and NeoPhotonics entered into a credit agreement 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 increase working capital associated with NeoPhotonics’ growth plans. During fiscal 2022, the Company funded a $30.0 million loan to NeoPhotonics. On August 1, 2022, we funded an additional $20.0 million loan to NeoPhotonics. The interest was payable monthly in arrears on the first day of each month. The loans would have matured on January 14, 2024 unless earlier repaid or accelerated. The $50.0 million loans in aggregate were included as part of the total purchase price consideration. (3) We paid $22.6 million cash consideration to holders of vested NeoPhotonics equity awards as of closing, of which $13.6 million was allocated to the purchase price consideration and $9.0 million was expensed immediately after the Closing date. 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 $22.1 million of merger-related costs, representing professional and other direct acquisition costs. Of the $22.1 million of merger-related costs , $8.3 million was incurred in fiscal year 2022, and $1.2 million and $13.8 million was incurred during the three and six months ended December 31, 2022, respectively, which was recor ded as selling, general and administrative expense in the condensed consolidated statements of operations. We allocated the fair value of the purchase price consideration to the assets acquired and liabilities assumed as of the Closing date based on their estimated fair values. The excess of purchase price consideration over the fair value of net assets acquired is recorded as goodwill. Our preliminary allocation of the purchase price consideration to the assets acquired and liabilities assumed as of the Closing date is as follows ( in millions ): Fair Value Total purchase price consideration $ 934.4 Assets acquired Cash and cash equivalents $ 92.9 Accounts receivable, net 66.5 Inventories 84.3 Prepayments and other current assets 24.2 Property, plant and equipment, net 106.1 Operating lease right-of-use assets, net 16.9 Other intangible assets, net (1) 412.5 Deferred tax asset 0.1 Other non-current assets 1.9 Total assets 805.4 Liabilities assumed Accounts payable 79.6 Accrued payroll and related expenses 11.1 Accrued expenses 4.1 Other current liabilities 10.6 Operating lease liabilities, current 2.8 Operating lease liabilities, non-current 13.2 Deferred tax liability 39.8 Other non-current liabilities 28.2 Total liabilities 189.4 Goodwill $ 318.4 (1) Other intangible assets include customer relationship of $144.5 million, developed technology of $220.0 million, and in-process research and development (“IPR&D”) of $48.0 million. Refer to “Note 8. Goodwill and Other Intangible Assets” for more information. The allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount allocated to goodwill, is based upon preliminary information and subject to change. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair value of inventories, property, plant and equipment, intangible assets, deferred tax assets and liabilities, and contingent liabilities. Further adjustments may result before the end of the measurement period, which ends one year from the Closing date. During the measurement period, if new information is obtained about facts and circumstances that existed as of the Closing date that, if known, would have resulted in revised estimated values of assets acquired and liabilities assumed, we will revise the preliminary purchase price allocation. The effect of measurement period adjustments to the estimated fair values will be calculated as if the adjustments had been completed on the acquisition date. The impact of all changes that do not qualify as measurement period adjustments will be included in current period earnings. Goodwill has been assigned to the OpComms segment. The preliminary goodwill of $318.4 million arising from the acquisition is attributed to the expected synergies, including future cost efficiencies and other benefits that are expected to be generated by combining Lumentum and NeoPhotonics. None of the goodwill is expected to be deductible for local tax purposes. Refer to “Note 8. Goodwill and Other Intangible Assets.” From the Closing date, NeoPhotonics contributed $104.6 million and $177.4 million of our consolidated net revenue for the three and six months ended December 31, 2022, respectively. Due to the continued integration of the combined businesses, as well as our corporate structure and the allocation of selling, general and administrative costs, it is impracticable to determine NeoPhotonics’ contribution to our earnings. Supplemental Pro Forma Information The following supplemental pro forma information presents the combined results of operations for the three and six months ended December 31, 2022 and January 1, 2022, as if the merger was completed at the first day of fiscal 2022. The supplemental pro forma financial information presented below is not necessarily indicative of the financial position or results of operations that would have been realized if the acquisition had been completed on the date indicated. The supplemental pro forma financial information does not reflect synergies that might have been achieved, nor is it indicative of future operating results or financial position. The pro forma financial information includes adjustments for: (i) additional amortization expense that would have been recognized related to the acquired intangible assets, (ii) additional depreciation expense that would have been recognized related to the acquired property, plant, and equipment, (iii) a dditional cost of sales related to the inventory valuation adjustment, (iv) acquisition related costs, such as third party transaction costs and restructuring costs, (v) stock-based compensation expense an d (vi) the estimated income tax effect on the pro forma adjustments. The supplemental pro forma financial information for the periods presented is as follows ( in millions ): Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Net revenue $ 506.0 $ 527.3 $ 1,036.7 $ 1,059.4 Net income (loss) (25.8) 22.8 6.6 45.0 Acquisition of IPG Photonics’ Telecom Transmission Product Lines On August 15, 2022 (“IPG Closing date”), we completed a transaction to acquire IPG Photonics’ telecom transmission product lines that are used to develop and market products for use in telecommunications and datacenter infrastructure, including Digital Signal Processors (DSPs), ASICs and optical transceivers (“IPG product lines”). This acquisition enables us to expand our business in the OpComms segment. We have applied the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations to account for this transaction. The total purchase price is $55.9 million, which was paid in cash. Our preliminary allocation of the purchase price consideration includes $29.1 million of in process research and development (“IPR&D”), $8.6 million of developed technology, $2.3 million of customer relationships, and $5.0 million of other net assets and liabilities, resulting in preliminary goodwill of $10.9 million. The allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount allocated to goodwill, is based upon preliminary information and adjustments may result before the end of the measurement period, which ends one year from the IPG Closing date. We incurred $0.1 million and $1.5 million of transaction costs, respectively, during the three and six months ended December 31, 2022, which was recor ded as selling, general and administrative expense in the condensed consolidated statements of operations. The pro forma financial information from the acquisition of the IPG product lines, assuming the acquisition had occurred as of the first day of the fiscal year prior to the fiscal year of the acquisition, as well as revenue and earnings generated during the current fiscal year, were not material for disclosure purposes. |
Cash, Cash Equivalents and Shor
Cash, Cash Equivalents and Short-term Investments | 6 Months Ended |
Dec. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Short-term Investments | Note 5. Cash, Cash Equivalents and Short-term Investments The following table summarizes our cash, cash equivalents and short-term investments by category for the periods presented ( in millions ): Amortized Gross Gross Fair Value December 31, 2022: Cash $ 383.3 $ — $ — $ 383.3 Cash equivalents: Commercial paper 4.8 — — 4.8 Money market funds 180.1 — — 180.1 U.S. Treasury securities 23.9 — — 23.9 Total cash and cash equivalents $ 592.1 $ — $ — $ 592.1 Short-term investments: Certificates of deposit $ 27.6 $ — $ — $ 27.6 Commercial paper 88.0 — (0.2) 87.8 Corporate debt securities 504.2 0.1 (4.8) 499.5 Municipal bonds 1.0 — — 1.0 Foreign government bonds 1.4 — — 1.4 U.S. Agency securities 130.5 — (1.6) 128.9 U.S. Treasury securities 344.9 — (2.8) 342.1 Total short-term investments $ 1,097.6 $ 0.1 $ (9.4) $ 1,088.3 July 2, 2022: Cash $ 235.9 $ — $ — $ 235.9 Cash equivalents: Commercial paper 23.6 — — 23.6 Money market funds 1,000.2 — — 1,000.2 U.S. Agency securities 8.0 — — 8.0 U.S. Treasury securities 22.5 — 22.5 Total cash and cash equivalents $ 1,290.2 $ — $ — $ 1,290.2 Short-term investments: Certificates of deposit $ 28.3 $ — $ — $ 28.3 Commercial paper 107.4 — (0.4) 107.0 Corporate debt securities 539.9 (7.4) 532.5 Municipal bonds 1.0 — — 1.0 U.S. Agency securities 67.1 — (1.4) 65.7 U.S. Treasury securities 528.2 0.3 (4.2) 524.3 Total short-term investments $ 1,271.9 $ 0.3 $ (13.4) $ 1,258.8 We review our investment portfolio to identify and evaluate investments that have indicators of possible impairment. Factors considered in determining whether a loss is other-than-temporary include, but are not limited to, the length of time and extent a security’s fair value has been below its cost, the financial condition and near-term prospects of the investee, the credit quality of the security’s issuer, likelihood of recovery and our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in value. For the debt instruments we own, we also evaluate whether we have the intent to sell the security or whether it is more likely than not that we will be required to sell the security before recovery of its cost basis. We have not recorded our unrealized losses on our short-term investments into income because we do not intend to sell nor is it more likely than not that we will be required to sell these investments prior to recovery of their amortized cost basis. We use the specific-identification method to determine any realized gains or losses from the sale of our short-term investments classified as available-for-sale. During the three and six months ended December 31, 2022, we did not realize significant gains or losses on a gross level from the sale of our short-term investments classified as available-for-sale. During the three and six months ended December 31, 2022, our other income (expense), net was $3.7 million income and $17.5 million income, respectively, which includes interest and investment income on cash equivalents and short-term investments of $7.7 million and $12.5 million, respectively. During the three and six months ended January 1, 2022, our other income (expense), net was $1.0 million income and $1.6 million income, respectively, which includes interest and investment income on cash equivalents and short-term investments of $0.6 million and $1.2 million, respectively. As of December 31, 2022 and July 2, 2022, we recorded interest receivables of $5.3 million and $3.9 million, respectively, in prepayments and other current assets within the condensed consolidated balance sheets. We did not recognize an allowance for credit losses against interest receivables in any of the periods presented as there were no such losses. The following table summarizes unrealized losses on our cash equivalents and short-term investments by category that have been in a continuous unrealized loss position for more than 12 months and less than 12 months as of the periods presented, respectively ( in millions ): Continuous Loss Position For More Than 12 Months Continuous Loss Position For Less Than 12 Months Gross Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2022: U.S. Agency securities $ 45.9 $ (1.1) $ 83.0 $ (0.5) $ (1.6) Certificates of deposit — — 5.7 — — Commercial paper — — 73.4 (0.2) (0.2) Corporate debt securities 283.9 (3.0) 176.2 (1.8) (4.8) Municipal bonds 1.0 — — — — Foreign government bonds — — 1.4 — — U.S. government bonds 148.1 (2.4) 98.2 (0.4) (2.8) Total $ 478.9 $ (6.5) $ 437.9 $ (2.9) $ (9.4) July 2, 2022: U.S. Agency securities $ — $ — $ 73.7 $ (1.4) $ (1.4) Certificates of deposit — — 16.2 — — Commercial paper — — 130.7 (0.4) (0.4) Corporate debt securities 57.4 (0.9) 473.2 (6.5) (7.4) Municipal bonds — — 1.0 — — U.S. government bonds — — 366.0 (4.2) (4.2) Total $ 57.4 $ (0.9) $ 1,060.8 $ (12.5) $ (13.4) The following table classifies our short-term investments by remaining maturities ( in millions ): December 31, 2022 July 2, 2022 Amortized Cost Fair Value Amortized Cost Fair Value Due in 1 year $ 879.5 $ 871.6 $ 1,010.9 $ 1,002.2 Due in 1 year through 5 years 218.1 216.7 261.0 256.6 $ 1,097.6 $ 1,088.3 $ 1,271.9 $ 1,258.8 All available-for-sale securities have been classified as current, based on management’s intent and ability to use the funds in current operations. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 6. Fair Value Measurements We determine fair value based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value assumes that the transaction to sell the asset or transfer the liability occurs in the principal or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value: Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3: Inputs are unobservable inputs based on our assumptions. The fair value of our Level 1 financial instruments, such as money market funds and U.S. Treasury securities, which are traded in active markets, is based on quoted market prices for identical instruments. The fair value of our Level 2 fixed income securities is obtained from an independent pricing service, which may use quoted market prices for identical or comparable instruments or model driven valuations using observable market data or inputs corroborated by observable market data. Our marketable securities are held by custodians who obtain investment prices from a third-party pricing provider that incorporates standard inputs in various asset price models. Our procedures include controls to ensure that appropriate fair values are recorded, including comparing the fair values obtained from our pricing service against fair values obtained from another independent source. Financial assets measured at fair value on a recurring basis are summarized below ( in millions ): Level 1 Level 2 Level 3 Total December 31, 2022: (1) Assets: Cash equivalents: Commercial paper $ — $ 4.8 $ — $ 4.8 Money market funds 180.1 — — 180.1 U.S. Treasury securities 23.9 — — 23.9 Short-term investments: Certificates of deposit — 27.6 — 27.6 Commercial paper — 87.8 — 87.8 Corporate debt securities — 499.5 — 499.5 Municipal bonds — 1.0 — 1.0 Foreign government bonds — 1.4 — 1.4 U.S. Agency securities — 128.9 — 128.9 U.S. Treasury securities 342.1 — — 342.1 Total assets $ 546.1 $ 751.0 $ — $ 1,297.1 (1) Excludes $383.3 million in cash held in our bank accounts as of December 31, 2022. Level 1 Level 2 Level 3 Total July 2, 2022: (1) Assets: Cash equivalents: Commercial paper $ — $ 23.6 $ — $ 23.6 Money market funds 1,000.2 — — 1,000.2 U.S. Agency securities — 8.0 — 8.0 U.S. Treasury securities 22.5 — — 22.5 Short-term investments: Certificates of deposit — 28.3 — 28.3 Commercial paper — 107.0 — 107.0 Corporate debt securities — 532.5 — 532.5 Municipal bonds — 1.0 — 1.0 U.S. Agency securities — 65.7 — 65.7 U.S. Treasury securities 524.3 — — 524.3 Total assets $ 1,547.0 $ 766.1 $ — $ 2,313.1 (1) Excludes $235.9 million in cash held in our bank accounts as of July 2, 2022. Financial Instruments Not Recorded at Fair Value on a Recurring Basis We report our financial instruments at fair value with the exception of the 2028 Notes, 2026 Notes and 2024 Notes. The estimated fair value of the convertible notes was determined based on the trading price of the convertible notes as of the last day of trading for the period. We consider the fair value of the notes to be a Level 2 measurement as they are not actively traded in markets. The carrying amounts and estimated fair values of the 2028 Notes, 2026 Notes and 2024 Notes are as follows for the periods presented ( in millions ): December 31, 2022 July 2, 2022 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value 2028 Notes $ 855.0 $ 659.7 $ 634.7 $ 735.7 2026 Notes 1,045.3 907.4 831.4 1,065.0 2024 Notes 420.7 473.2 409.9 614.2 $ 2,321.0 $ 2,040.3 $ 1,876.0 $ 2,414.9 Assets Measured at Fair Value on a Non-Recurring Basis We periodically review our intangible and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its eventual disposition. If not recoverable, an impairment loss would be calculated based on the excess of the carrying amount over the fair value. Management utilizes various valuation methods, including an income approach, a market approach and a cost approach, to estimate the fair value of intangibles and other long-lived assets. During the annual impairment testing performed in the fourth quarter of fiscal 2022, we concluded that our intangible and other long-lived assets were not impaired. We review our intangible and other long-lived assets for impairment at least annually in the fourth quarter of each fiscal year, absent any interim indicators of impairment. There were no indicators of impairment during the three and six months ended December 31, 2022. |
Balance Sheet Details
Balance Sheet Details | 6 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | Note 7. Balance Sheet Details Allowance for Current Expected Credit Losses We did not have any allowance for credit losses other than our allowance for uncollectible accounts receivable. As of December 31, 2022 and July 2, 2022, the allowance for credit losses on our trade receivables was less than $0.1 million for both periods. Inventories The components of inventories were as follows ( in millions ): December 31, 2022 July 2, 2022 Raw materials and purchased parts $ 166.2 $ 98.9 Work in process 118.9 92.2 Finished goods 81.8 59.0 Inventories $ 366.9 $ 250.1 In connection with the NeoPhotonics merger, we recorded $17.8 million of inventory fair value step-up as of the merger Closing date. During the three and six months ended December 31, 2022, we recorded an amortization of fair value step-up of $9.6 million and $14.2 million, respectively. As of December 31, 2022, the remaining fair value step-up is $3.6 million. Operating Lease Right-of-Use Assets Operating lease right-of-use assets, net were as follows ( in millions ): December 31, 2022 July 2, 2022 Operating lease right-of-use assets $ 119.1 $ 102.1 Less: accumulated amortization (34.2) (28.5) Operating lease right-of-use assets, net $ 84.9 $ 73.6 In connection with the NeoPhotonics merger, we acquired $16.9 million right-of-use assets as of the merger Closing date, related to leases of real estate properties used as our manufacturing and R&D premises. These leases are accounted for as operating leases and have the remaining lease term ranging from 3.8 to 6.4 years at the Closing date. Property, Plant and Equipment, Net The components of property, plant and equipment, net were as follows ( in millions ): December 31, 2022 July 2, 2022 Land $ 63.3 $ 49.7 Buildings and improvements 146.6 105.3 Machinery and equipment 632.6 548.8 Computer equipment and software 36.1 31.3 Furniture and fixtures 10.1 8.9 Leasehold improvements 45.9 35.7 Construction in progress 75.9 47.0 1,010.5 826.7 Less: Accumulated depreciation (522.8) (466.2) Property, plant and equipment, net $ 487.7 $ 360.5 In connection with our merger with NeoPhotonics, we assumed $106.1 million of property, plant and equipment, net, as of the Closing date. Our construction in progress primarily includes machinery and equipment that we expect to place in service in the next 12 months. During the three and six months ended December 31, 2022, we recorded depreciation expense of $26.4 million and $50.9 million, respectively. During the three and six months ended January 1, 2022, we recorded depreciation expense of $20.6 million and $41.0 million, respectively. Other Current Liabilities The components of other current liabilities were as follows (in millions) : December 31, 2022 July 2, 2022 Restructuring accrual and related charges (1) $ 14.1 $ — Warranty accrual 8.4 10.0 Income tax payable (2) 20.5 26.0 Other current liabilities 8.2 3.4 Other current liabilities $ 51.2 $ 39.4 (1) Refer to “Note 11. Restructuring and Related Charges.” (2) Refer to “Note 12. Income Taxes.” Other Non-Current Liabilities The components of other non-current liabilities were as follows ( in millions ): December 31, 2022 July 2, 2022 Asset retirement obligations $ 8.1 $ 4.6 Pension and related accruals (1) 9.0 7.7 Unrecognized tax benefit 52.1 30.5 Other non-current liabilities 7.9 0.1 Other non-current liabilities $ 77.1 $ 42.9 (1) We have defined benefit pension plans in Japan, Switzerland, and Thailand. In connection with our merger with NeoPhotonics, we assumed an additional defined benefit plan covering employees in Japan. As of December 31, 2022, pension and related accruals in Japan, Switzerland and Thailand were $4.7 million, $0.4 million and $3.9 million, r espectively. As of July 2, 2022, pension and related accruals in Japan, Switzerland and Thailand were $2.6 million, $1.7 million and $3.4 million, respectively. We typically re-evaluate the assumptions related to the fair value of our defined benefit obligations annually and make any updates as necessary. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 8. Goodwill and Other Intangible Assets Goodwill In the first quarter of fiscal 2023, we completed two acquisitions, our merger with NeoPhotonics and the acquisition of IPG product lines. We recognized goodwill in the amount of $318.4 million related to the NeoPhotonics merger and $10.9 million related to the acquisition of the IPG product lines. We allocated the entire goodwill amount in connection with the two acquisitions to the OpComms segment. The following table presents the changes in goodwill by reportable segments during the six months ended December 31, 2022 ( in millions) : Optical Communications Commercial Lasers Total Balance as of July 2, 2022 $ 363.5 $ 5.4 $ 368.9 Acquisition of NeoPhotonics (1) 318.4 — 318.4 Acquisition of IPG product lines (2) 10.9 — 10.9 Balance as of December 31, 2022 $ 692.8 $ 5.4 $ 698.2 (1) We recorded $318.3 million of goodwill as of the acquisition date and $0.1 million of measurement period adjustments to goodwill during the second quarter of fiscal 2023. (2) We recorded $6.5 million of goodwill as of the acquisition date and $4.4 million of measurement period adjustments to goodwill during the second quarter of fiscal 2023. Impairment of Goodwill We review goodwill for impairment during the fourth quarter of each fiscal year or more frequently if events or circumstances indicate that an impairment loss may have occurred. In the fourth quarter of fiscal 2022, we completed the annual impairment test of goodwill, which indicated there was no goodwill impairment. During the second quarter of fiscal 2023, we evaluated the current economic uncertainties due to threats of a recession, increasing inflation, decline in our share prices, and rising interest rates, and determined based on the qualitative assessment that it is not more likely than not that the carrying value of goodwill is impaired. No goodwill impairment existed during the three and six months ended December 31, 2022. Other Intangibles The intangible assets are amortized on a straight-line basis over the estimated useful lives, except for customer relationships, which are amortized using an accelerated method of amortization over the expected customer lives, more accurately reflecting the pattern of realization of economic benefits we expect to derive. Acquired developed technologies are amortized to cost of sales and customer relationships are amortized to selling, general and administrative expenses in the consolidated statement of operations. IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When an IPR&D project is completed, the IPR&D is reclassified as an amortizable purchased intangible asset and amortized over the asset’s estimated useful life. As of December 31, 2022, we recorded the preliminary fair value of acquired intangible assets of $412.5 million related to the merger with NeoPhotonics and $40.0 million related to the acquisition of the IPG product lines. Refer to “Note 4. Business Combinations.” During the annual impairment testing performed in the fourth quarter of fiscal 2022, we concluded that our intangible and other long-lived assets were not impaired. We review our intangible and other long-lived assets for impairment at least annually in the fourth quarter of each fiscal year, absent any interim indicators of impairment. There were no indicators of impairment during the three and six months ended December 31, 2022. The intangible assets acquired from the acquisitions were as follows as of the acquisition date ( in millions, except for weighted average amortization periods ): Preliminary fair value at the acquisition date Weighted average amortization period NeoPhotonics IPG product lines Total acquired Acquired developed technologies $ 220.0 $ 8.6 $ 228.6 5.2 Customer relationships 144.5 2.3 146.8 5.9 In-process research and development 48.0 29.1 77.1 n/a Total intangible assets $ 412.5 $ 40.0 $ 452.5 The following tables present details of our other intangibles, including those acquired in connection with our acquisitions in the first quarter of fiscal 2023, as of the periods presented ( in millions, except for weighted average remaining amortization period ): December 31, 2022 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Weighted average remaining amortization period (years) Acquired developed technologies $ 618.9 $ (352.3) $ 266.6 4.3 Customer relationships 291.8 (95.6) 196.2 5.1 In-process research and development 77.1 — 77.1 n/a Total intangible assets $ 987.8 $ (447.9) $ 539.9 July 2, 2022 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Weighted average remaining amortization period (years) Acquired developed technologies $ 390.3 $ (303.6) $ 86.7 2.5 Customer relationships 145.0 (76.0) 69.0 4.4 Total intangible assets $ 535.3 $ (379.6) $ 155.7 The following table presents details of amortization for the periods presented (in millions ): Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Cost of sales $ 24.8 $ 15.9 $ 47.7 $ 31.7 Selling, general and administrative 11.3 5.6 20.6 11.2 Total amortization of intangibles $ 36.1 $ 21.5 $ 68.3 $ 42.9 Based on the carrying amount of our acquired developed technologies and customer relationships as of December 31, 2022, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows (in millions) : Fiscal Years Remainder of 2023 $ 57.5 2024 110.2 2025 97.3 2026 84.9 2027 73.0 Thereafter 39.9 Total future amortization $ 462.8 |
Debt
Debt | 6 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note 9. Debt Convertible Notes 2028 Notes In March 2022, we issued $861.0 million in aggregate principal amount of 0.50% convertible notes due in 2028 (the “2028 Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The 2028 Notes are governed by an indenture between the Company and U.S. Bank Trust Company National Association (as successor in interest to U.S. Bank National Association), as a trustee (the “2028 Indenture”). The 2028 Notes are unsecured and do not contain any financial covenants, restrictions on dividends, incurrence of senior debt or other indebtedness, or the issuance or repurchase of securities by us. The net proceeds from the sale of the 2028 Notes was $854.8 million, after deducting $6.2 million in issuance costs. In addition, we incurred $0.7 million in professional fees in connection with this transaction. Concurrent with the issuance of the 2028 Notes, we used $200.0 million of the net proceeds to repurchase our common stock in privately negotiated transactions. We intend to use the remaining net proceeds for general corporate purposes, which may include capital expenditures and working capital. The 2028 Notes bear interest at a rate of 0.50% per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2022. The 2028 Notes will mature on June 15, 2028, unless earlier redeemed, repurchased by us, or converted pursuant to their terms. The initial conversion rate is 7.6319 shares of common stock per $1,000 principal amount of the 2028 Notes (which is equivalent to an initial conversion price of approximately $131.03 per share). The conversion rate is subject to adjustment upon the occurrence of certain specified events, but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (as defined in the 2028 Indenture) or our issuance of a notice of redemption, we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert the 2028 Notes in connection with such make-whole fundamental change or notice of redemption. Prior to the close of business on the business day immediately preceding March 15, 2028, holders of the 2028 Notes may convert their 2028 Notes only under the following circumstances: • during any fiscal quarter (and only during such fiscal quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the applicable conversion price, or $170.34, on each applicable trading day; • during the five consecutive business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the 2028 Notes for each trading day of such measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on each such trading day; • if the Company calls any or all of the 2028 Notes for redemption, at any time prior to the close of business on the second business day immediately preceding the redemption date; or • upon the occurrence of specified corporate events, as specified in the 2028 Indentures. On or after March 15, 2028 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2028 Notes at any time. Upon conversion, we may satisfy our conversion obligation in cash, shares of common stock or a combination of cash and shares of common stock, at our election. We may redeem for cash all or any portion of the 2028 Notes, at our option (subject to the partial redemption limitation set forth in the 2028 Indenture), on or after June 20, 2025, if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2028 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2028 Notes. If we elect to redeem fewer than all of the outstanding 2028 Notes, at least $100.0 million aggregate principal amount of the 2028 Notes must be outstanding and not subject to redemption as of the redemption notice date. Upon the occurrence of a fundamental change (as defined in the 2028 Indenture), holders may require the Company to repurchase all or a portion of their 2028 Notes for cash at a price equal to 100% of the principal amount of the 2028 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. We initially bifurcated the principal amount of the 2028 Notes into liability and equity components. The liability component of the 2028 Notes was initially valued at $629.8 million based on the contractual cash flow discounted at an appropriate comparable market on non-convertible debt borrowing rate at the date of issuance, which was 5.7%, with the equity component representing the residual amount of the proceeds of $231.2 million, which was recorded as a debt discount. Upon adoption of ASU 2020-06 in the first quarter of fiscal 2023, our 2028 Notes were accounted for as a single liability measured at amortized cost. Refer to “Note 2. Recently Issued Accounting Pronouncement” for the detailed adoption impact. 2026 Notes In December 2019, we issued $1,050.0 million in aggregate principal amount of 0.50% convertible notes due in 2026 (the “2026 Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The 2026 Notes are governed by an indenture between the Company and U.S. Bank Trust Company National Association (as successor in interest to U.S. Bank National Association, as a trustee (the “2026 Indenture”). We used approximately $196.0 million of the net proceeds of the offering to repay in full all amounts outstanding under our term loan credit facility, and a portion of the net proceeds of the offering to purchase approximately $200.0 million of our common stock concurrently with the pricing of the offering in privately negotiated transactions. The 2026 Notes are unsecured and do not contain any financial covenants, restrictions on dividends, incurrence of senior debt or other indebtedness, or the issuance or repurchase of securities by us. The 2026 Notes bear interest at a rate of 0.50% per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on June 15, 2020. The 2026 Notes will mature on December 15, 2026, unless earlier redeemed, repurchased by us, or converted pursuant to their terms. The initial conversion rate is 10.0711 shares of common stock per $1,000 principal amount of the 2026 Notes (which is equivalent to an initial conversion price of approximately $99.29 per share). The conversion rate is subject to adjustment upon the occurrence of certain events specified in the 2026 Indenture but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (as defined in the 2026 Indenture) or our issuance of a notice of redemption, we will, in certain circumstances, increase the conversion rate by a number of additional shares set forth in the 2026 Indenture or a holder that elects to convert the 2026 Notes in connection with such make-whole fundamental change or notice of redemption. Prior to the close of business on the business day immediately preceding September 15, 2026, holders of the 2026 Notes may convert their 2026 Notes only under the following circumstances: • during any fiscal quarter (and only during such fiscal quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price of the 2026 Notes, or $129.08 on each applicable trading day; • during the five consecutive business day period after any five consecutive trading day period (the "2026 measurement period") in which the trading price per $1,000 principal amount of the 2026 Notes for each trading day of the 2026 measurement period was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate for the 2026 Notes on each such trading day; • if we call any or all of the 2026 Notes for redemption, at any time prior to the close of business on the second business day immediately preceding the relevant redemption date; or • upon the occurrence of specified corporate events. On or after September 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2026 Notes at any time. Upon conversion, we may satisfy our conversion obligation in cash, shares of common stock or a combination of cash and shares of common stock, at our election. We may redeem for cash, all or any portion of the 2026 Notes, at our option, on or after December 20, 2023, if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide a notice of redemption at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2026 Notes. Upon the occurrence of a fundamental change (as defined in the 2026 Indenture), holders may require us to repurchase all or a portion of the 2026 Notes for cash at a price equal to 100% of the principal amount of the 2026 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. We initially bifurcated the principal amount of the 2026 Notes into liability and equity components. The liability component of the 2026 Notes was initially valued at $734.8 million based on the contractual cash flows discounted at an appropriate comparable market non-convertible debt borrowing rate at the date of issuance of 5.8% with the equity component representing the residual amount of the proceeds of $315.2 million, which was recorded as a debt discount. Upon adoption of ASU 2020-06 in the first quarter of fiscal 2023, our 2026 Notes were accounted for as a single liability measured at amortized cost. Refer to “Note 2. Recently Issued Accounting Pronouncement” for the detailed adoption impact. 2024 Notes In March 2017, we issued $450.0 million in aggregate principal amount 2024 Notes of 0.25% convertible notes due in 2024 (the “2024 Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. The 2024 Notes are governed by an indenture between the Company, as the issuer, and U.S. Bank Trust Company National Association (as successor in interest to U.S. Bank National Association), as trustee (the “2024 Indenture”). The 2024 Notes are unsecured and do not contain any financial covenants, restrictions on dividends, incurrence of senior debt or other indebtedness, or the issuance or repurchase of securities by us. The 2024 Notes bear interest at a rate of 0.25% per year. Interest on the 2024 Notes is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2017. The 2024 Notes will mature on March 15, 2024, unless earlier repurchased by us or converted pursuant to their terms. The initial conversion rate of the 2024 Notes is 16.4965 shares of common stock per $1,000 principal amount of 2024 Notes, which is equivalent to an initial conversion price of approximately $60.62 per share. The conversion rate is subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (as defined in the 2024 Indenture) or our issuance of a notice of redemption, we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert the 2024 Notes in connection with such make-whole fundamental change or notice of redemption. Prior to the close of business on the business day immediately preceding December 15, 2023, each holder of the 2024 Notes may convert their 2024 Notes only under the following circumstances: • during any fiscal quarter (and only during such fiscal quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the applicable conversion price, or $78.80 on each applicable trading day; • during the five consecutive business day period after any five consecutive trading day period (the “2024 measurement period”) in which the trading price per $1,000 principal amount of 2024 Notes for each trading day of such 2024 measurement period was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate for the 2024 Notes on each such trading day; • upon the occurrence of specified corporate events. On or after December 15, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2024 Notes at any time. In addition, upon the occurrence of a make-whole fundamental change (as defined in the 2024 Indenture), we will, in certain circumstances, increase the conversion rate by a number of additional shares set forth in the 2024 Indenture for a holder that elects to convert 2024 Notes in connection with such make-whole fundamental change. We may not redeem the 2024 Notes prior to their maturity date and no sinking fund is provided for the 2024 Notes. Upon the occurrence of a fundamental change (as defined in the 2024 Indenture), holders may require us to repurchase all or a portion of their 2024 Notes for cash at a price equal to 100% of the principal amount of the 2024 Notes to be repurchased, plus any accrued and unpaid interest. During the three and six months ended December 31, 2022 we received conversion requests of less than $0.1 million principal amount of the 2024 Notes, which we settled with cash in accordance with the 2024 Indenture. Since issuing the 2024 Notes, we have converted a total of approximately $1.9 million principal amount of the 2024 Notes. The remaining principal amount of the 2024 Notes as of December 31, 2022 was $448.1 million. We considered the features embedded in the 2024 Notes other than the conversion feature, including the holders’ put feature, our call feature, and the make-whole feature, and concluded that they are not required to be bifurcated and accounted for separately from the host debt instrument. Prior to the Tax Matters Agreement settlement condition (“TMA settlement condition”), because we could only settle the 2024 Notes in cash, we determined that the conversion feature met the definition of a derivative liability. We separated the derivative liability from the host debt instrument based on the fair value of the derivative liability. During fiscal 2017, we satisfied the TMA settlement condition. As such, the value of the conversion option is no longer marked-to-market and was reclassified to additional paid-in capital within stockholders’ equity on our condensed consolidated balance sheets. The adoption of ASU 2020-06 did not change the presentation of the 2024 Notes, as the conversion feature associated with the 2024 Notes continues to be classified within stockholders’ equity. Convertible Notes - Additional Disclosures Our convertible notes consisted of the following components as of the periods presented ( in millions ): Liability component: December 31, 2022 July 2, 2022 2024 Notes (1) 2026 Notes (2) 2028 Notes (3) 2024 Notes (1) 2026 Notes (2) 2028 Notes (3) Principal $ 448.1 $ 1,050.0 $ 861.0 $ 448.1 $ 1,050.0 $ 861.0 Unamortized debt discount and issuance costs (27.4) (4.7) (6.0) (38.2) (218.6) (226.3) Net carrying amount of the liability component $ 420.7 $ 1,045.3 $ 855.0 $ 409.9 $ 831.4 $ 634.7 (1) If the closing price of our stock exceeds $78.80 (or 130% of the conversion price of $60.62) for 20 of the last 30 trading days of any future fiscal quarter, our 2024 Notes would become convertible at the option of the holders during the next fiscal quarter. During the fourth quarter of fiscal 2022, the 2024 Notes were convertible at the option of the holders and therefore, the debt component of our 2024 Notes was classified as current liabilities in our condensed consolidated balance sheet. Although the 2024 Notes will not be convertible during the third quarter of fiscal 2023 due to our stock price not exceeding $78.80 for 20 of the last 30 trading days of the quarter ended December 31, 2022, we continue to classify the 2024 Notes in current liabilities, as holders may convert their 2024 Notes at any time on or after December 15, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date. (2) If the closing price of our stock exceeds $129.08 (or 130% of the conversion price of $99.29) for 20 of the last 30 trading days of any future fiscal quarter, our 2026 Notes would become convertible at the option of the holders during the subsequent fiscal quarter and the debt would be reclassified to current liabilities in our condensed consolidated balance sheet. (3) If the closing price of our stock exceeds $170.34 (or 130% of the conversion price of $131.03) for 20 of the last 30 trading days of any future fiscal quarter, our 2028 Notes would become convertible at the option of the holders during the subsequent fiscal quarter and the debt would be reclassified to current liabilities in our condensed consolidated balance sheet. The following table sets forth interest expense information related to the convertible notes for the periods presented (in millions) : Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Contractual interest expense $ 2.7 $ 1.6 $ 5.4 $ 3.2 Amortization of the debt discount and debt issuance costs 6.2 15.5 11.9 30.8 Total interest expense $ 8.9 $ 17.1 $ 17.3 $ 34.0 The future interest and principal payments related to our convertible notes are as follows as of December 31, 2022 (in millions) : Fiscal Years 2024 Notes 2026 Notes 2028 Notes Total Remainder of 2023 $ 0.6 $ 2.6 $ 2.2 $ 5.4 2024 449.2 5.3 4.3 458.8 2025 — 5.3 4.3 9.6 2026 — 5.3 4.3 9.6 2027 and thereafter — 1,052.4 869.6 1,922.0 Total convertible notes payments $ 449.8 $ 1,070.9 $ 884.7 $ 2,405.4 The principal balances of our convertible notes are reflected in the payment periods in the table above based on their respective contractual maturities. Mitsubishi Bank Loans In connection with our merger of NeoPhotonics, we assumed several loan agreements with MUFG Bank, Ltd. (the “Mitsubishi Bank Loans”) for an aggregate fair value of approximately $5.9 million, approximately $0.9 million of which was paid in the fiscal first quarter of 2023. In October 2022, we fully paid the remaining outstanding amount of the Mitsubishi Bank Loans of approximately $5.0 million. We recorded $0.1 million of interest expense related to the Mitsubishi Bank Loans for both the three and six months ended December 31, 2022. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 10. Accumulated Other Comprehensive Income (Loss) Our accumulated other comprehensive income (loss) consists of the accumulated net unrealized gains or losses on foreign currency translation adjustments, the defined benefit obligations and available-for-sale securities. The changes in accumulated other comprehensive income (loss) were as follows for the periods as presented ( in millions ): Foreign currency translation adjustments, net of tax (1) Defined benefit obligations, net of tax (2) Unrealized gain (loss) on available-for-sale securities, net of tax Total Beginning balance as of July 2, 2022 $ 9.7 $ 1.0 $ (10.3) $ 0.4 Other comprehensive loss — — (0.6) (0.6) Ending balance as of October 1, 2022 9.7 1.0 (10.9) (0.2) Other comprehensive gain — — 3.6 3.6 Ending balance as of December 31, 2022 $ 9.7 $ 1.0 $ (7.3) $ 3.4 Foreign currency translation adjustments, net of tax (1) Defined benefit obligations, net of tax (2) Unrealized gain (loss) on available-for-sale securities, net of tax Total Beginning balance as of July 3, 2021 $ 9.7 $ (1.4) $ (0.1) $ 8.2 Other comprehensive income — — 0.3 0.3 Ending balance as of October 2, 2021 9.7 (1.4) 0.2 8.5 Other comprehensive loss — — (2.3) (2.3) Ending balance as of January 1, 2022 $ 9.7 $ (1.4) $ (2.1) $ 6.2 (1) In fiscal 2019, we established the functional currency for our worldwide operations as the U.S. dollar. Translation adjustments reported prior to December 10, 2018 remain as a component of accumulated other comprehensive income (loss) in our condensed consolidated balance sheets, until all or a part of the investment in the subsidiaries is sold or liquidated. (2) We re-evaluate the assumptions related to the fair value of our defined benefit obligations annually and make any updates as necessary. |
Restructuring and Related Charg
Restructuring and Related Charges | 6 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Charges | Note 11. Restructuring and Related Charges We have initiated various strategic restructuring actions primarily to reduce costs, consolidate our operations, rationalize the manufacturing of our products and align our business in response to market conditions and as a result of our acquisitions in the first quarter of fiscal 2023. The following table summarizes the activity of restructuring and related charges for the periods as presented ( in millions ): Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Balance as of beginning of period $ 3.1 $ 0.8 $ — $ 5.7 Charges (reversals), net 13.9 0.1 23.2 (1.0) Payments (2.9) (0.6) (9.1) (4.4) Balance as of end of period $ 14.1 $ 0.3 $ 14.1 $ 0.3 During the three months ended December 31, 2022, we recorded restructuring and related charges of $13.9 million in our condensed consolidated statements of operations, which was primarily due to company-wide integration efforts as a result of the merger with NeoPhotonics, as well as our cost reduction initiatives. During the six months ended December 31, 2022, we recorded restructuring and related charges of $23.2 million in our condensed consolidated statements of operations, which was primarily attributable to company-wide integration efforts as a result of the merger with NeoPhotonics, our cost reduction initiatives, as well as severance and employee-related benefits associated with NeoPhotonics’ executive severance and retention agreements. These agreements provide for payments and benefits upon an involuntary termination of employment under certain circumstances. We made $2.9 million and $9.1 million of restructuring payments during the three and six months ended December 31, 2022, respectively. In addition, we recorded $1.5 million of incremental stock-based compensation during the three months ended December 31, 2022 in connection with our restructuring activities during the period. During the three and six months ended January 1, 2022, we recorded a net reversal to our restructuring and related charges of $1.0 million in our condensed consolidated statements of operations, which was attributable to lower than anticipated employee severance charges primarily as a result of retaining and re-assigning certain employees. Any changes in the estimates of executing our restructuring activities will be reflected in our future results of operations. |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12. Income Taxes Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, we update our estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, we make a cumulative adjustment in such period. Our quarterly tax provision and estimate of our annual effective tax rate are subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income relates, changes in how we do business, and tax law developments. We recorded a tax provision of $4.6 million and $23.8 million for the three and six months ended December 31, 2022 , respectively. Our tax provision for the three months ended December 31, 2022 includes a discrete tax expense of $4.0 million , primarily related to the U.S. return to provision differences for transaction costs, currency re-measurements, and shortfall in connection with stock-based compensation vested during the quarter. Our estimated effective tax rate for fiscal 2023 also differs from the 21% U.S. statutory rate primarily due to the income tax expense from the tax effect of Global Intangible Low-Taxed Income (“GILTI”), net of benefit for foreign tax credits, subpart F inclusion and non-deductible stock-based compensation, partially offset by the income tax benefit from U.S. federal R&D tax credits . As of December 31, 2022, we had $52.1 million of unrecognized tax benefits, which, if recognized, would affect the effective tax rate. We are subject to examination of income tax returns by various domestic and foreign tax authorities. The timing of resolution and closure of these tax examinations is highly unpredictable. Although it is possible that certain ongoing tax examinations may be concluded within the next 12 months, we cannot reasonably estimate the impact to tax expense and net income from tax exams that could be resolved or closed within the next 12 months. Subject to audit timing and uncertainty, we expect the amount of unrecognized tax benefit that would become recognized due to expiration of the statute of limitations and affect the effective tax rate to decrease by $12.0 million over the next 12 months. |
Equity
Equity | 6 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Equity | Note 13. Equity Description of Lumentum Stock-Based Benefit Plans Equity Incentive Plan On November 16, 2022, our stockholders approved amendments to the Amended and Restated Equity Incentive Plan (the “2015 Plan”) to (i) increase the number of shares of common stock reserved for issuance by an additional 0.9 million shares and (ii) to make certain other changes to reflect good corporate governance practices. As of December 31, 2022, we had 3.8 million shares subject to restricted stock units, restricted stock awards, and performance stock units issued and outstanding under the 2015 Plan. These grants are performance-based, time-based or a combination of both and are expected to vest over one Replacement Awards In connection with the merger with NeoPhotonics, we issued equity awards to certain NeoPhotonics employees, consisting of restricted stock units (the “Replacement Awards”) in exchange for their NeoPhotonics equity awards. The terms of these Replacement Awards are substantially similar to the original NeoPhotonics equity awards. The Replacement Awards consisted of 0.4 million restricted stock units with a grant date fair value of $93.4 per share, which represents our closing stock price on the Closing date. The total fair value of these Replacement Awards is $40.2 million, $3.5 million of which is attributable to employee services rendered through August 3, 2022, the merger Closing date, and was recognized as a component of the merger consideration and stock-based compensation in the consolidated statements of stockholders’ equity. The remaining fair value of the Replacement Awards is recorded as stock-based compensation over the remaining vesting period. Refer to “Note 4. Business Combinations.” Restricted Stock Units Restricted stock units (“RSUs”) under the 2015 Plan are grants of shares of our common stock, the vesting of which is based on the requisite service requirement. Generally, our RSUs are subject to forfeiture and are expected to vest over one During the six months ended December 31, 2022, our board of directors approved grants of 1.6 million RSUs which primarily vest over three years. In addition, we issued 0.4 million RSUs that were issued as part of the Replacement Awards in connection with the merger with NeoPhotonics as described above. Performance Stock Units Performance stock units (“PSUs”) under the 2015 Plan are grants of shares of our common stock that vest upon the achievement of certain performance and service conditions. We begin recognizing compensation expense when we conclude that it is probable that the performance conditions will be achieved. We reassess the probability of vesting at each reporting period and adjust our compensation cost based on this probability assessment. Our PSUs are subject to risk of forfeiture until performance and service conditions are satisfied and generally vest between one During the six months ended December 31, 2022, 0.3 million PSUs were issued to executive and certain non-executive employees as part of our revised Annual Incentive Plan. These PSUs have an aggregate grant date fair value of $26.0 million and are subject to performance targets and service conditions, and vest over a one Employee Stock Purchase Plan Our 2015 Employee Stock Purchase Plan (the “2015 Purchase Plan”) provides eligible employees with the opportunity to acquire an ownership interest in the Company through periodic payroll deductions and provides a 15% purchase price discount as well a s a 6-month look-back peri od. The 2015 Purchase Plan is structured as a qualified employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended. The 2015 Purchase Plan will terminate upon the date on which all shares available for issuance have been sold. Of the 3.0 million shares authorized under the 2015 Purchase Plan, 1.3 million shares remained available for issuance as of December 31, 2022. Stock-Based Compensation The impact on our results of operations of recording stock-based compensation by function for the periods presented was as follows (in millions) : Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Cost of sales $ 6.7 $ 5.2 $ 12.2 $ 9.8 Research and development 10.6 5.4 20.2 10.4 Selling, general and administrative 19.3 16.7 50.8 31.9 Total stock-based compensation $ 36.6 $ 27.3 $ 83.2 $ 52.1 In connection with the NeoPhotonics merger, we issued replacement equity awards (the “Replacement Awards”) in settlement of certain NeoPhotonics equity awards at the merger 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 is $3.5 million, which was accounted for as part of the consideration transferred and was recorded under stock-based compensation in our consolidated statements of stockholders’ equity as of December 31, 2022. Additionally, certain equity awards for NeoPhotonics employees were accelerated. The total stock-based compensation associated with the acceleration was $11.9 million, of which $9.0 million was settled in cash. We recorded the $11.9 million for the accelerated awards in our consolidated statements of operations during the first quarter of fiscal year 2023. Refer to “ Note 4. Business Combinations.” Included in stock-based compensation for the three and six months ended December 31, 2022 , is $6.2 million and $15.0 million of stock-based compensation costs related to PSUs, respectively. The amount of stock-based compensation expense recognized in any one period related to PSUs can vary based on the achievement or anticipated achievement of the performance conditions. If the performance conditions are not met or not expected to be met, no compensation cost would be recognized on the underlying PSUs, and any previously recognized compensation expense related to those PSUs would be reversed. During the three months ended December 31, 2022, we recorded $1.5 million of stock-based compensation in connection with our restructuring activities during the period. Refer to “Note 11. Restructuring and Related Charges”. Total income tax benefit associated with stock-based compensation recognized in our condensed consolidated statements of operations during the years presented was as follows (in millions) : Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Income tax benefit associated with stock-based compensation $ 6.4 $ 4.2 $ 11.5 $ 8.2 Approximately $14.1 million and $6.4 million of stock-based compensation was capitalized to inventory as of December 31, 2022 and July 2, 2022, respectively. As of December 31, 2022, $224.7 million of stock-based compensation cost related to RSU awards remains to be amortized. That RSU cost is expected to be recognized over an estimated amortization period o f 2.1 years. Stock Award Activity The following table summarizes our award activity for the three and six months ended December 31, 2022 (in millions, except per share amounts) : Restricted Stock Units Performance Stock Units Number of Shares Weighted-Average Grant Date Fair Value per Share Number of Shares Weighted-Average Grant Date Fair Value per Share Balance as of July 2, 2022 2.0 $ 85.9 0.3 $ 81.9 Replacement Awards Issued 0.4 93.4 — — Granted 1.6 86.9 0.6 88.2 Vested (0.7) 83.9 (0.1) 70.5 Canceled (0.2) 88.1 (0.1) 88.6 Balance as of December 31, 2022 3.1 $ 87.8 0.7 $ 89.3 A summary of awards available for grant is as follows (in millions) : Awards Available for Grant Balance as of July 2, 2022 3.8 Assumed in connection with NeoPhotonics merger 0.4 Replacement Awards (0.4) Authorized 0.9 Granted (2.2) Canceled 0.3 Balance as of December 31, 2022 2.8 Employee Stock Purchase Plan Activity The 2015 Purchase Plan expense for the three and six months ended December 31, 2022 was $0.8 million and $2.0 million, respectively. The 2015 Purchase Plan expense for the three and six months ended January 1, 2022 was $0.9 million and $2.1 million, respectively. The expense related to the 2015 Purchase Plan is recorded on a straight-line basis over the relevant subscription period. During the six months ended December 31, 2022, there were 0.1 million shares issued to employees through the 2015 Purchase Plan. During the six months ended January 1, 2022, there were 0.1 million shares issued to employees through the 2015 Purchase Plan. Repurchase and Retirement of Common Stock On May 7, 2021, our board of directors approved the 2021 share buyback program, which authorizes us to utilize up to $700.0 million to purchase our own shares of common stock. On March 3, 2022, our board of directors approved an increase in our share buyback program, which authorizes us to utilize up to an aggregate amount of $1.0 billion (an increase from $700.0 million) to purchase our own shares of common stock through May 2024, but may be suspended or terminated by the board of directors at any time. During the six months ended December 31, 2022, we repurchased 0.3 million shares of our common stock at an average price of $89.80 per share for an aggregate purchase price of $25.7 million. Since the board of directors approved the share buyback program, we have repurchased 7.4 million shares in aggregate at an average price of $83.38 per share for a total purchase price of $615.5 million. We recorded the $615.5 million aggregate purchase price as a reduction of retained earnings within our condensed consolidated balance sheet. All repurchased shares were retired immediately. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14. Commitments and Contingencies Purchase Obligations Purchase obligations of $391.5 million as of December 31, 2022, represent legally-binding commitments to purchase inventory and other commitments made in the normal course of business to meet operational requirements. In addition, we assumed certain purchase orders in connection with our merger with NeoPhotonics for the purchase of inventory and other items in the ordinary course of its business. Although open purchase orders are considered enforceable and legally binding, the terms generally allow the option to cancel, reschedule and adjust the requirements based on our business needs prior to the delivery of goods or performance of services. Obligations to purchase inventory and other commitments are generally expected to be fulfilled within one year. We depend on a limited number of contract manufacturers, subcontractors and suppliers for raw materials, packages and standard components. We generally purchase these single or limited source products through standard purchase orders or one-year supply agreements and have no significant long-term guaranteed supply agreements with such vendors. While we seek to maintain a sufficient safety stock of such products and maintain on-going communications with our suppliers to guard against interruptions or cessation of supply, our business and results of operations could be adversely affected by a stoppage or delay of supply, substitution of more expensive or less reliable products, receipt of defective parts or contaminated materials, increases in the price of such supplies, or our inability to obtain reduced pricing from our suppliers in response to competitive pressures. Product Warranties We provide reserves for the estimated costs of product warranties at the time revenue is recognized. We typically offer a twelve month warranty for most of our products. However, in some instances depending upon the product, product components or application of our products by the end customer, our warranties can vary and generally range from six months to five years. We estimate the costs of our warranty obligations on an annualized basis based on our historical experience of known product failure rates, use of materials to repair or replace defective products and service delivery costs incurred in correcting product failures. In addition, from time to time, specific warranty accruals may be made if unforeseen technical problems arise with specific products. We assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary. The following table presents the changes in our warranty reserve for the periods presented ( in millions ): Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Balance as of beginning of period $ 10.1 $ 5.1 $ 10.0 $ 5.0 Warranties assumed in NeoPhotonics merger — — 0.7 — Provision for warranty 2.8 3.8 4.3 5.5 Utilization of reserve (4.5) (0.3) (6.6) (1.9) Balance as of end of period $ 8.4 $ 8.6 $ 8.4 $ 8.6 Environmental Liabilities Our research and development, manufacturing and distribution operations involve the use of hazardous substances and are regulated under international, federal, state and local laws governing health and safety and the environment. We apply strict standards for protection of the environment and occupational health and safety to sites inside and outside the United States, even if not subject to regulations imposed by foreign governments. We believe that our properties and operations at our facilities comply in all material respects with applicable environmental laws and occupational health and safety laws. However, the risk of environmental liabilities cannot be completely eliminated and there can be no assurance that the application of environmental and health and safety laws will not require us to incur significant expenditures. We are also regulated under a number of international, federal, state and local laws regarding recycling, product packaging and product content requirements. The environmental, product content/disposal and recycling laws are gradually becoming more stringent and may cause us to incur significant expenditures in the future. Legal Proceedings We are subject to a variety of claims and suits that arise from time to time in the ordinary course of our business. While management currently believes that resolving claims against us, individually or in the aggregate, will not have a material adverse impact on our financial position, results of operations or statements of cash flows, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. We accrue for loss contingencies when it is both probable that we will incur the loss and when we can reasonably estimate the amount of the loss or range of loss. We have recorded $7.8 million with respect to the settlement of certain non-ordinary course litigation matters under accrued expenses in our condensed consolidated balance sheet as of December 31, 2022. Oclaro Merger Litigation In connection with our acquisition of Oclaro in 2018, seven lawsuits were filed by purported stockholders of Oclaro challenging the proposed merger (the “Merger”). All but one was voluntarily dismissed after the Oclaro Merger closed. The remaining lawsuit, SaiSravan B. Karri v. Oclaro, Inc., et al., No. 3:18-cv-03435-JD (the “Karri Lawsuit”), was filed in the United States District Court for the Northern District of California and is styled as a class action. The Karri Lawsuit alleges, among other things, that Oclaro and its directors violated Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 14a-9 promulgated thereunder by disseminating an incomplete and misleading Form S-4, including proxy statement/prospectus. The Karri Lawsuit further alleged that Oclaro’s directors violated Section 20(a) of the Exchange Act by failing to exercise proper control over the person(s) who violated Section 14(a) of the Exchange Act. The plaintiff in the Karri Lawsuit seeks, among other things, damages to be awarded to the plaintiff and any class, if a class is certified, and litigation costs, including attorneys’ fees. After the plaintiff in the Karri Lawsuit was appointed as lead plaintiff and his counsel as lead counsel, the plaintiff filed a first amended complaint on April 15, 2019. The first amended complaint, also named Lumentum as a defendant but Lumentum has since been dismissed from the action. On October 8, 2020, the court granted in part and denied in part the defendant’s motion to dismiss the first amended complaint. On December 1, 2020, defendants answered the first amended complaint. On September 17, 2021, lead plaintiff filed a second amended complaint. Defendants moved to stay discovery in light of the second amended complaint. On January 11, 2022 the Court struck the second amended complaint as untimely, terminated defendants’ motions to dismiss as moot, and lifted the stay. The case proceeded through fact and expert discovery. On August 16, 2022, Plaintiff moved for class certification and to be appointed class representative. Defendants opposed the motion. The action subsequently was stayed while the parties participated in a mediation. On January 18, 2023, the plaintiff filed a Notice of Settlement informing the court of an agreement in principle between the parties for a class-wide settlement of the Karri Lawsuit. On January 24, 2023, in light of the potential settlement, the court vacated all pretrial and trial dates and ordered the plaintiff to file a motion for preliminary approval of the settlement by March 17, 2023. In the event that the settlement does not go forward for any reason, Defendants intend to continue to defend the Karri Lawsuit vigorously. NeoPhotonics Merger Litigation In connection with our planned acquisition of NeoPhotonics Corporation (“NeoPhotonics”) announced in November 2021, ten lawsuits (the “NeoPhotonics Lawsuits”) were filed by purported stockholders of NeoPhotonics challenging the proposed merger (the “NeoPhotonics Merger”). All of the NeoPhotonics Lawsuits have been dismissed. Indemnifications In the normal course of business, we enter into agreements that contain a variety of representations and warranties and provide for general indemnification. Exposure under these agreements is unknown because claims may be made against us in the future, and we may record charges in the future as a result of these indemnification obligations. As of December 31, 2022, we did not have any material indemnification claims that were probable or reasonably possible. Audit Proceedings We are under audit by various domestic and foreign tax authorities with regards to income tax and indirect tax matters. In some, although not all cases, we have reserved for potential adjustments to our provision for income taxes and accrual of indirect taxes that may result from examinations by these tax authorities or final outcomes in judicial proceedings, and we believe that the final outcome of these examinations, agreements or judicial proceedings will not have a material effect on our results of operations. If events occur which indicate payment of these amounts is unnecessary, the reversal of the liabilities would result in the recognition of benefits in the period we determine the liabilities are no longer necessary. If our estimates of the federal, state, and foreign income tax liabilities and indirect tax liabilities are less than the ultimate assessment, it could result in a further charge to expense. |
Operating Segments and Geograph
Operating Segments and Geographic Information | 6 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Operating Segments and Geographic Information | Note 15. Operating Segments and Geographic Information Our chief executive officer is our Chief Operating Decision Maker (“CODM”). The CODM allocates resources to the segments based on their business prospects, competitive factors, net revenue and gross margin. We do not track all of our property, plant and equipment by operating segments. The geographic identification of these assets is set forth below. 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 communications and commercial lasers. We have two operating segments, Optical Communications, which we refer to as OpComms, and Commercial Lasers, which we refer to as Lasers. Our OpComms products address the following markets: telecommunications and data communications (“Telecom and Datacom”), and consumer and industrial (“Consumer and Industrial”), and include product lines from the recent merger of NeoPhotonics and the acquisition of IPG product lines. The two operating segments were primarily determined based on how the CODM views and evaluates our operations. The CODM regularly reviews operating results to make decisions about resources to be allocated to the segments and to assess their performance. Other factors, including market separation and customer specific applications, go-to-market channels, products and manufacturing, are considered in determining the formation of these operating segments. OpComms Our OpComms products include a wide range of components, modules and subsystems to support customers including carrier networks for access (local), metro (intracity), long-haul (city-to-city and worldwide) and submarine (undersea) applications. Additionally, our products address enterprise, cloud, and data center applications, including storage-access networks (“SANs”), local-area networks (“LANs”) and wide-area networks (“WANs”). These products enable the transmission and transport of video, audio and data over high-capacity fiber-optic cables. We maintain leading positions in these 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. We also sell laser chips for use in the manufacture of high-speed Datacom transceivers. In the Consumer and Industrial market, our OpComms diode laser products include vertical cavity surface emitting lasers (“VCSELs”) and edge emitting lasers. In the Consumer end-market, our laser light sources are integrated into 3D sensing cameras which are used in applications in mobile devices, gaming, payment kiosks, computers, and other consumer electronics devices. Applications include biometric identification, computational photography, virtual and augmented reality, and natural user interfaces. Emerging applications for our lasers include automotive safety systems, LiDAR for advanced driver assistance systems in automobiles and autonomous vehicles, self-navigating robotics and drones in industrial applications, and 3D capture of objects coupled with 3D imaging or printing. In the Industrial end-market, our diode lasers are used primarily as pump sources for pulsed and kilowatt class fiber lasers. Lasers Our Lasers products serve our customers in markets and applications such as sheet metal processing, general manufacturing, biotechnology, graphics and imaging, remote sensing, and precision machining such as drilling in printed circuit boards, wafer singulation, glass cutting and solar cell scribing. Our Lasers products are used in a variety of OEM applications including diode-pumped solid-state, fiber, diode, direct-diode and gas lasers such as argon-ion and helium-neon lasers. Fiber lasers provide kW-class output powers combined with excellent beam quality and are used in sheet metal processing and metal welding applications. 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. We also provide high-powered and ultrafast lasers for the industrial and scientific markets. Manufacturers use high-power, ultrafast lasers to create micro parts for consumer electronics and to process semiconductor, LED, and other types of chips. Use of ultrafast lasers for micromachining applications is being driven primarily by the increasing use of consumer electronics and connected devices globally. Reportable Segments We do not allocate research and development, sales and marketing, or general and administrative expenses to our segments because management does not include the information in its measurement of the performance of the operating segments. In addition, we do not allocate amortization and impairment of acquisition-related intangible assets, stock-based compensation and certain other charges impacting the gross margin of each segment because management does not include this information in its measurement of the performance of the operating segments. Information on reportable segments utilized by our CODM is as follows ( in millions) : Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Net revenue: OpComms $ 448.8 $ 397.4 $ 902.2 $ 803.4 Lasers 57.2 49.3 110.6 91.7 Net revenue $ 506.0 $ 446.7 $ 1,012.8 $ 895.1 Gross profit: OpComms $ 197.0 $ 201.8 $ 413.0 $ 427.7 Lasers 30.0 26.2 58.1 47.0 Total segment gross profit 227.0 228.0 471.1 474.7 Unallocated corporate items: Stock-based compensation (6.7) (5.2) (12.2) (9.8) Amortization of acquired intangibles (24.8) (15.9) (47.7) (31.7) Amortization of acquired inventory fair value adjustments (9.6) — (14.2) — Inventory and fixed asset write down due to product line exits — (0.1) — (0.1) Integration related costs (2.8) — (2.8) — Other (charges) gains, net (1) (16.9) 0.7 (26.8) 6.6 Gross profit $ 166.2 $ 207.5 $ 367.4 $ 439.7 (1) Other (charges) gains of unallocated corporate items for the three and six months ended December 31, 2022 primarily relate to $11.7 million and $19.0 million of charges to acquire components from various brokers to satisfy customer demand. Other (charges) gains of unallocated corporate items for the six months ended January 1, 2022 primarily relate to $5.9 million of gain as a result of selling equipment that was no longer needed after we transferred certain product lines to new production facilities in fiscal 2021. Concentrations We operate in three geographic regions: Americas, Asia-Pacific, and EMEA (Europe, Middle East, and Africa). Net revenue is assigned to the geographic region and country where our product is initially shipped. For example, certain customers may request shipment of our product to a contract manufacturer in one country, which may differ from the location of their end customers. The following table presents net revenue by the three geographic regions we operate in and net revenue from countries that generally represented 10% or more of our total net revenue (in millions, except percentage data): Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Amount % of Total Amount % of Total Amount % of Total Amount % of Total Net revenue: Americas: United States $ 65.5 12.9 % $ 51.0 11.4 % $ 127.7 12.6 % $ 79.1 8.8 % Mexico 59.5 11.8 38.3 8.6 117.0 11.6 71.3 8.0 Other Americas 3.8 0.8 2.7 0.6 6.1 0.6 4.7 0.5 Total Americas $ 128.8 25.5 % $ 92.0 20.6 % $ 250.8 24.8 % $ 155.1 17.3 % Asia-Pacific: Hong Kong $ 65.9 13.0 % $ 115.0 25.8 % $ 143.5 14.2 % $ 257.3 28.8 % South Korea 52.0 10.3 77.9 17.4 119.7 11.8 183.0 20.4 Japan 50.8 10.0 46.7 10.5 95.6 9.4 92.8 10.4 Thailand 77.9 15.4 26.2 5.9 135.4 13.4 43.3 4.8 Other Asia-Pacific 84.7 16.7 59.7 13.4 173.6 17.1 108.6 12.1 Total Asia-Pacific $ 331.3 65.4 % $ 325.5 73.0 % $ 667.8 65.9 % $ 685.0 76.4 % EMEA $ 45.9 9.1 % $ 29.2 6.5 % $ 94.2 9.3 % $ 55.0 6.1 % Total net revenue $ 506.0 $ 446.7 $ 1,012.8 $ 895.1 During the three and six months ended December 31, 2022, our net revenue from a single customer, which represented 10% or greater of the total net revenue, was concentrated with two customers, who collectively accounted for 31% and 33% of our total net revenue, respectively. During the three and six months ended January 1, 2022, our net revenue from a single customer, which represented 10% or greater of total net revenue was concentrated with two customers, who accounted for 41% and 46% of our total net revenue, respectively. As of December 31, 2022, our accounts receivable from a single customer, which represented 10% or greater of the total accounts receivable, was concentrated with one customer, which represented 14% of gross accounts receivable. As of July 2, 2022, our accounts receivable from a single customer, which represented 10% or greater of the total accounts receivable, was concentrated with two customers, which individually represented 10% and 10% of gross accounts receivable, respectively. Long-lived assets, namely property, plant and equipment, net, were identified based on the physical location of the assets in the corresponding geographic areas as of the periods indicated (in millions) : December 31, 2022 July 2, 2022 Property, plant and equipment, net United States $ 131.2 $ 107.8 Thailand 131.7 107.6 Japan 94.2 38.9 China 52.2 32.7 Other countries 78.4 73.5 Total property, plant and equipment, net $ 487.7 $ 360.5 We purchase a portion of our inventory from contract manufacturers and vendors located primarily in Taiwan, Thailand and Malaysia. During the three and six months ended December 31, 2022, our net inventory purchases from a single contract manufacturer, which represented 10% or greater of our total net inventory purchases, were concentrated with one and two contract manufacturers, who collectively accounted for43% and 52% of total net inventory purchases, respectively. During the three and six months ended January 1, 2022, our net inventory purchases from a single contract manufacturer, which represented 10% or greater of our total net inventory purchases, were concentrated with two contract manufacturers, who collectively accounted for 58% and 61% of total net inventory purchases, respectively. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Dec. 31, 2022 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue Recognition | Note 16. Revenue Recognition Disaggregation of Revenue We disaggregate revenue by product and by geography. We do not present other levels of disaggregation, such as by type of products, customer, markets, contracts, duration of contracts, timing of transfer of control and sales channels, as this information is not used by our CODM to manage the business. The table below discloses our total net revenue attributable to each of our two reportable segments. In addition, the table sets forth the percentage of our total net revenue attributable to our product offerings that serve Telecom and Datacom, and Consumer and Industrial markets, which accounted for 10% or more of our total net revenue during the periods presented ( in millions, except percentage data ): Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 OpComms: Telecom and Datacom $ 384.2 75.9 % $ 267.1 59.8 % $ 744.3 73.5 % $ 483.1 54.0 % Industrial and Consumer 64.6 12.8 % 130.3 29.2 % 157.9 15.6 % 320.3 35.8 % Total OpComms $ 448.8 88.7 % $ 397.4 89.0 % $ 902.2 89.1 % $ 803.4 89.8 % Lasers 57.2 11.3 % 49.3 11.0 % 110.6 10.9 % 91.7 10.2 % Net Revenue $ 506.0 $ 446.7 $ 1,012.8 $ 895.1 Contract Balances The following table reflects the changes in contract balances for the periods presented ( in millions, except percentages ): Contract balances Balance sheet location December 31, 2022 July 2, 2022 Change Percentage Change Accounts receivable, net Accounts receivable, net $ 330.5 $ 262.0 $ 68.5 26.1 % Deferred revenue and customer deposits Other current liabilities $ 1.3 $ — $ 1.3 n/a |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), which requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, actual results may be different from the estimates. Operating results for the quarter ended December 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending July 1, 2023. In the opinion of the Company’s management, the information presented herein reflects all normal and recurring adjustments necessary for a fair presentation of our results of operations, financial position, stockholders’ equity and cash flows. Our critical accounting policies are those that affect our financial statements materially and involve difficult, subjective or complex judgments by management. Those policies are inventory valuation, revenue recognition, income taxes, goodwill and business combinations. 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 the COVID-19 pandemic, global supply chain constraints, inflation, and a dynamic demand environment. Additionally, instability in the global credit markets, the impact of uncertainty regarding global central bank monetary policy, capital expenditure reductions, unemployment and other labor issues, decline in stock markets, the instability in the geopolitical environment in many parts of the world and the current economic challenges in China continue to put pressure on global economic conditions and our business and operating results. |
Business Combinations | Business Combinations On August 3, 2022, we completed a merger with NeoPhotonics Corporation (“NeoPhotonics”). Our condensed consolidated financial statements include the operating results of NeoPhotonics for the period from the date of the closing of the merger through December 31, 2022. We have applied the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations to account for this transactio n. Refer to “Note 4. Business Combinations” for further discussion of the merger. On August 15, 2022, we completed a transaction to acquire IPG Photonics’ telecom transmission product lines. Our condensed consolidated financial statements include the operating results of this business unit for the period from the date of the acquisition through December 31, 2022. We have applied the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations to account for this transaction . Refer to “Note 4. Business Combinations” for further discussion of this acquisition. |
Fiscal Years | Fiscal Years We utilize a 52-53 week fiscal year ending on the Saturday closest to June 30th. Every fifth or sixth fiscal year will have a 53-week period. The additional week in a 53-week year is added to the third quarter, making such quarter consist of 14 weeks. Our fiscal 2023 is a 52-week year ending on July 1, 2023, with the quarter ended December 31, 2022 being a 13-week quarterly period. Our fiscal 2022 was a 52-week year that ended on July 2, 2022, with the quarter ended January 1, 2022 being a 13-week quarterly period. |
Principles of Consolidation | Principles of Consolidation These interim unaudited condensed consolidated financial statements include the accounts of Lumentum Holdings Inc. and its wholly-owned subsidiaries. All inter-company transactions and balances are eliminated in consolidation. 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 condensed consolidated financial statements. |
Accounting Pronouncements Recently Adopted | Accounting Pronouncements Recently Adopted In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805)—Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers . This ASU is expected to improve comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. The new guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. We early adopted the new standard in the first quarter of fiscal 2023 in connection with the merger with NeoPhotonics. There was no material impact to our condensed consolidated financial statements as of and for the three and six months period ended December 31, 2022. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible instruments by removing the separation models for (i) convertible debt with a cash conversion feature and (ii) convertible instruments with a beneficial conversion feature. As a result, a convertible debt instrument is accounted for as a single liability measured at its amortized cost. ASU 2020-06 also requires the application of the if-converted method for calculating diluted earnings per share. We adopted the standard as of July 3, 2022, using the modified retrospective approach. Upon adoption, our 2026 Notes and 2028 Notes were accounted for as a single liability measured at amortized cost, resulting in: (i) an increase to the convertible notes liability balance of $433.0 million to reflect the full principal amount of the convertible notes outstanding, net of issuance costs; (ii) a reduction to additional paid-in capital, net of estimated income tax effects, of $426.5 million, to remove the equity component separately recorded for the conversion features associated with the convertible notes; (iii) an increase to deferred tax assets, net of $92.1 million; and (iv) a cumulative-effect adjustment of $85.6 million, net of estimated income tax effects, to decrease the accumulated deficit. In addition, the adoption requires the use of the if-converted method for all convertible notes in the diluted net income per share calculation and the inclusion of the effect of potential share settlement of the convertible notes, if the effect is more dilutive. There wa s no impact to diluted earnings per share for the three and six months ended December 31, 2022, as the inclusion of potential shares of common stock related to the convertible notes was anti-dilutive. Ref er to “Note 9. Debt” for further information. The following table sets forth the impact upon adoption of ASU 2020-06 as of July 3, 2022 ( in millions ): Short Term Debt - 2024 Notes Long Term Debt - 2026 Notes Long Term Debt - 2028 Notes Additional Paid-In Capital Accumulated Deficit Deferred Tax Asset (Liability), net Balances pre-adoption of ASC 2020-06 $ 409.9 $ 831.4 $ 634.7 $ 2,003.6 $ 129.1 $ 12.9 Reclassify amounts from equity to debt — 312.9 229.3 (542.2) — — Adjustment for interest accretion — (99.5) (9.7) — (109.2) — Tax effect — — — 115.7 23.6 92.1 Balances upon adoption of ASC 2020-06 $ 409.9 $ 1,044.8 $ 854.3 $ 1,577.1 $ 43.5 $ 105.0 |
Fair Value Measurements | We determine fair value based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value assumes that the transaction to sell the asset or transfer the liability occurs in the principal or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value: Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3: Inputs are unobservable inputs based on our assumptions. The fair value of our Level 1 financial instruments, such as money market funds and U.S. Treasury securities, which are traded in active markets, is based on quoted market prices for identical instruments. The fair value of our Level 2 fixed income securities is obtained from an independent pricing service, which may use quoted market prices for identical or comparable instruments or model driven valuations using observable market data or inputs corroborated by observable market data. Our marketable securities are held by custodians who obtain investment prices from a third-party pricing provider that incorporates standard inputs in various asset price models. Our procedures include controls to ensure that appropriate fair values are recorded, including comparing the fair values obtained from our pricing service against fair values obtained from another independent source. Assets Measured at Fair Value on a Non-Recurring Basis We periodically review our intangible and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its eventual disposition. If not recoverable, an impairment loss would be calculated based on the excess of the carrying amount over the fair value. Management utilizes various valuation methods, including an income approach, a market approach and a cost approach, to estimate the fair value of intangibles and other long-lived assets. During the annual impairment testing performed in the fourth quarter of fiscal 2022, we concluded that our intangible and other long-lived assets were not impaired. We review our intangible and other long-lived assets for impairment at least annually in the fourth quarter of each fiscal year, absent any interim indicators of impairment. There were no indicators of impairment during the three and six months ended December 31, 2022. |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Accounting Standards Update and Change in Accounting Principle | The following table sets forth the impact upon adoption of ASU 2020-06 as of July 3, 2022 ( in millions ): Short Term Debt - 2024 Notes Long Term Debt - 2026 Notes Long Term Debt - 2028 Notes Additional Paid-In Capital Accumulated Deficit Deferred Tax Asset (Liability), net Balances pre-adoption of ASC 2020-06 $ 409.9 $ 831.4 $ 634.7 $ 2,003.6 $ 129.1 $ 12.9 Reclassify amounts from equity to debt — 312.9 229.3 (542.2) — — Adjustment for interest accretion — (99.5) (9.7) — (109.2) — Tax effect — — — 115.7 23.6 92.1 Balances upon adoption of ASC 2020-06 $ 409.9 $ 1,044.8 $ 854.3 $ 1,577.1 $ 43.5 $ 105.0 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Income (Loss) Attributable to Common Stockholders Per Share | The following table sets forth the computation of basic and diluted net income (loss) per share ( in millions, except per share data ): Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Numerator: Net income (loss) - basic and diluted $ (31.7) $ 56.7 $ (32.1) $ 138.2 Denominator: Weighted average common shares outstanding - basic 68.3 72.3 68.2 72.5 Effect of dilutive securities from stock-based benefit plans — 0.5 — 0.6 Shares issuable assuming conversion of the convertible notes — 2.5 — 2.3 Weighted average common shares outstanding - diluted 68.3 75.3 68.2 75.4 Net income (loss) per share: Basic $ (0.46) $ 0.78 $ (0.47) $ 1.91 Diluted $ (0.46) $ 0.75 $ (0.47) $ 1.83 |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions | The following tables summarize the total purchase price consideration ( in millions ): Fair Value Cash consideration for outstanding NeoPhotonics common stock (1) $ 867.3 Settlement of pre-existing relationship (loan to NeoPhotonics) (2) 50.0 Stock-based compensation (3) 17.1 Total purchase price consideration $ 934.4 (1) Under the terms of the Merger Agreement, NeoPhotonics stockholders received $16.00 per share for each of the 54.2 million NeoPhotonics common stock outstanding at the Closing date. As a result, we paid $867.3 million of cash consideration to shareholders of NeoPhotonics on the Closing date. (2) As contemplated by the Merger Agreement, on January 14, 2022, Lumentum and NeoPhotonics entered into a credit agreement 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 increase working capital associated with NeoPhotonics’ growth plans. During fiscal 2022, the Company funded a $30.0 million loan to NeoPhotonics. On August 1, 2022, we funded an additional $20.0 million loan to NeoPhotonics. The interest was payable monthly in arrears on the first day of each month. The loans would have matured on January 14, 2024 unless earlier repaid or accelerated. The $50.0 million loans in aggregate were included as part of the total purchase price consideration. (3) We paid $22.6 million cash consideration to holders of vested NeoPhotonics equity awards as of closing, of which $13.6 million was allocated to the purchase price consideration and $9.0 million was expensed immediately after the Closing date. 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. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Our preliminary allocation of the purchase price consideration to the assets acquired and liabilities assumed as of the Closing date is as follows ( in millions ): Fair Value Total purchase price consideration $ 934.4 Assets acquired Cash and cash equivalents $ 92.9 Accounts receivable, net 66.5 Inventories 84.3 Prepayments and other current assets 24.2 Property, plant and equipment, net 106.1 Operating lease right-of-use assets, net 16.9 Other intangible assets, net (1) 412.5 Deferred tax asset 0.1 Other non-current assets 1.9 Total assets 805.4 Liabilities assumed Accounts payable 79.6 Accrued payroll and related expenses 11.1 Accrued expenses 4.1 Other current liabilities 10.6 Operating lease liabilities, current 2.8 Operating lease liabilities, non-current 13.2 Deferred tax liability 39.8 Other non-current liabilities 28.2 Total liabilities 189.4 Goodwill $ 318.4 (1) Other intangible assets include customer relationship of $144.5 million, developed technology of $220.0 million, and in-process research and development (“IPR&D”) of $48.0 million. Refer to “Note 8. Goodwill and Other Intangible Assets” for more information. |
Schedule of Pro Forma Financial Information | The supplemental pro forma financial information for the periods presented is as follows ( in millions ): Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Net revenue $ 506.0 $ 527.3 $ 1,036.7 $ 1,059.4 Net income (loss) (25.8) 22.8 6.6 45.0 |
Cash, Cash Equivalents and Sh_2
Cash, Cash Equivalents and Short-term Investments (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash, Cash Equivalents and Short-Term Investments | The following table summarizes our cash, cash equivalents and short-term investments by category for the periods presented ( in millions ): Amortized Gross Gross Fair Value December 31, 2022: Cash $ 383.3 $ — $ — $ 383.3 Cash equivalents: Commercial paper 4.8 — — 4.8 Money market funds 180.1 — — 180.1 U.S. Treasury securities 23.9 — — 23.9 Total cash and cash equivalents $ 592.1 $ — $ — $ 592.1 Short-term investments: Certificates of deposit $ 27.6 $ — $ — $ 27.6 Commercial paper 88.0 — (0.2) 87.8 Corporate debt securities 504.2 0.1 (4.8) 499.5 Municipal bonds 1.0 — — 1.0 Foreign government bonds 1.4 — — 1.4 U.S. Agency securities 130.5 — (1.6) 128.9 U.S. Treasury securities 344.9 — (2.8) 342.1 Total short-term investments $ 1,097.6 $ 0.1 $ (9.4) $ 1,088.3 July 2, 2022: Cash $ 235.9 $ — $ — $ 235.9 Cash equivalents: Commercial paper 23.6 — — 23.6 Money market funds 1,000.2 — — 1,000.2 U.S. Agency securities 8.0 — — 8.0 U.S. Treasury securities 22.5 — 22.5 Total cash and cash equivalents $ 1,290.2 $ — $ — $ 1,290.2 Short-term investments: Certificates of deposit $ 28.3 $ — $ — $ 28.3 Commercial paper 107.4 — (0.4) 107.0 Corporate debt securities 539.9 (7.4) 532.5 Municipal bonds 1.0 — — 1.0 U.S. Agency securities 67.1 — (1.4) 65.7 U.S. Treasury securities 528.2 0.3 (4.2) 524.3 Total short-term investments $ 1,271.9 $ 0.3 $ (13.4) $ 1,258.8 |
Schedule of Unrealized Losses on Cash Equivalents and Short-Term Investments | The following table summarizes unrealized losses on our cash equivalents and short-term investments by category that have been in a continuous unrealized loss position for more than 12 months and less than 12 months as of the periods presented, respectively ( in millions ): Continuous Loss Position For More Than 12 Months Continuous Loss Position For Less Than 12 Months Gross Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2022: U.S. Agency securities $ 45.9 $ (1.1) $ 83.0 $ (0.5) $ (1.6) Certificates of deposit — — 5.7 — — Commercial paper — — 73.4 (0.2) (0.2) Corporate debt securities 283.9 (3.0) 176.2 (1.8) (4.8) Municipal bonds 1.0 — — — — Foreign government bonds — — 1.4 — — U.S. government bonds 148.1 (2.4) 98.2 (0.4) (2.8) Total $ 478.9 $ (6.5) $ 437.9 $ (2.9) $ (9.4) July 2, 2022: U.S. Agency securities $ — $ — $ 73.7 $ (1.4) $ (1.4) Certificates of deposit — — 16.2 — — Commercial paper — — 130.7 (0.4) (0.4) Corporate debt securities 57.4 (0.9) 473.2 (6.5) (7.4) Municipal bonds — — 1.0 — — U.S. government bonds — — 366.0 (4.2) (4.2) Total $ 57.4 $ (0.9) $ 1,060.8 $ (12.5) $ (13.4) |
Schedule of Investments in Debt Securities by Contractual Maturities | The following table classifies our short-term investments by remaining maturities ( in millions ): December 31, 2022 July 2, 2022 Amortized Cost Fair Value Amortized Cost Fair Value Due in 1 year $ 879.5 $ 871.6 $ 1,010.9 $ 1,002.2 Due in 1 year through 5 years 218.1 216.7 261.0 256.6 $ 1,097.6 $ 1,088.3 $ 1,271.9 $ 1,258.8 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets Measured at Fair Value on a Recurring Basis | Financial assets measured at fair value on a recurring basis are summarized below ( in millions ): Level 1 Level 2 Level 3 Total December 31, 2022: (1) Assets: Cash equivalents: Commercial paper $ — $ 4.8 $ — $ 4.8 Money market funds 180.1 — — 180.1 U.S. Treasury securities 23.9 — — 23.9 Short-term investments: Certificates of deposit — 27.6 — 27.6 Commercial paper — 87.8 — 87.8 Corporate debt securities — 499.5 — 499.5 Municipal bonds — 1.0 — 1.0 Foreign government bonds — 1.4 — 1.4 U.S. Agency securities — 128.9 — 128.9 U.S. Treasury securities 342.1 — — 342.1 Total assets $ 546.1 $ 751.0 $ — $ 1,297.1 (1) Excludes $383.3 million in cash held in our bank accounts as of December 31, 2022. Level 1 Level 2 Level 3 Total July 2, 2022: (1) Assets: Cash equivalents: Commercial paper $ — $ 23.6 $ — $ 23.6 Money market funds 1,000.2 — — 1,000.2 U.S. Agency securities — 8.0 — 8.0 U.S. Treasury securities 22.5 — — 22.5 Short-term investments: Certificates of deposit — 28.3 — 28.3 Commercial paper — 107.0 — 107.0 Corporate debt securities — 532.5 — 532.5 Municipal bonds — 1.0 — 1.0 U.S. Agency securities — 65.7 — 65.7 U.S. Treasury securities 524.3 — — 524.3 Total assets $ 1,547.0 $ 766.1 $ — $ 2,313.1 (1) Excludes $235.9 million in cash held in our bank accounts as of July 2, 2022. |
Schedule of Fair Value Measurements, Recurring and Nonrecurring | The carrying amounts and estimated fair values of the 2028 Notes, 2026 Notes and 2024 Notes are as follows for the periods presented ( in millions ): December 31, 2022 July 2, 2022 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value 2028 Notes $ 855.0 $ 659.7 $ 634.7 $ 735.7 2026 Notes 1,045.3 907.4 831.4 1,065.0 2024 Notes 420.7 473.2 409.9 614.2 $ 2,321.0 $ 2,040.3 $ 1,876.0 $ 2,414.9 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Components of Inventories | The components of inventories were as follows ( in millions ): December 31, 2022 July 2, 2022 Raw materials and purchased parts $ 166.2 $ 98.9 Work in process 118.9 92.2 Finished goods 81.8 59.0 Inventories $ 366.9 $ 250.1 |
Schedule of Operating Lease, Right-of-Use Assets, Net | Operating lease right-of-use assets, net were as follows ( in millions ): December 31, 2022 July 2, 2022 Operating lease right-of-use assets $ 119.1 $ 102.1 Less: accumulated amortization (34.2) (28.5) Operating lease right-of-use assets, net $ 84.9 $ 73.6 |
Schedule of Components of Property, Plant and Equipment, Net | The components of property, plant and equipment, net were as follows ( in millions ): December 31, 2022 July 2, 2022 Land $ 63.3 $ 49.7 Buildings and improvements 146.6 105.3 Machinery and equipment 632.6 548.8 Computer equipment and software 36.1 31.3 Furniture and fixtures 10.1 8.9 Leasehold improvements 45.9 35.7 Construction in progress 75.9 47.0 1,010.5 826.7 Less: Accumulated depreciation (522.8) (466.2) Property, plant and equipment, net $ 487.7 $ 360.5 |
Schedule of Components of Other Current Liabilities | The components of other current liabilities were as follows (in millions) : December 31, 2022 July 2, 2022 Restructuring accrual and related charges (1) $ 14.1 $ — Warranty accrual 8.4 10.0 Income tax payable (2) 20.5 26.0 Other current liabilities 8.2 3.4 Other current liabilities $ 51.2 $ 39.4 (1) Refer to “Note 11. Restructuring and Related Charges.” |
Schedule of Components of Other Non-Current Liabilities | The components of other non-current liabilities were as follows ( in millions ): December 31, 2022 July 2, 2022 Asset retirement obligations $ 8.1 $ 4.6 Pension and related accruals (1) 9.0 7.7 Unrecognized tax benefit 52.1 30.5 Other non-current liabilities 7.9 0.1 Other non-current liabilities $ 77.1 $ 42.9 (1) We have defined benefit pension plans in Japan, Switzerland, and Thailand. In connection with our merger with NeoPhotonics, we assumed an additional defined benefit plan covering employees in Japan. As of December 31, 2022, pension and related accruals in Japan, Switzerland and Thailand were $4.7 million, $0.4 million and $3.9 million, r espectively. As of July 2, 2022, pension and related accruals in Japan, Switzerland and Thailand were $2.6 million, $1.7 million and $3.4 million, respectively. We typically re-evaluate the assumptions related to the fair value of our defined benefit obligations annually and make any updates as necessary. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | The following table presents the changes in goodwill by reportable segments during the six months ended December 31, 2022 ( in millions) : Optical Communications Commercial Lasers Total Balance as of July 2, 2022 $ 363.5 $ 5.4 $ 368.9 Acquisition of NeoPhotonics (1) 318.4 — 318.4 Acquisition of IPG product lines (2) 10.9 — 10.9 Balance as of December 31, 2022 $ 692.8 $ 5.4 $ 698.2 (1) We recorded $318.3 million of goodwill as of the acquisition date and $0.1 million of measurement period adjustments to goodwill during the second quarter of fiscal 2023. (2) We recorded $6.5 million of goodwill as of the acquisition date and $4.4 million of measurement period adjustments to goodwill during the second quarter of fiscal 2023. |
Schedule of Acquired Developed Technology and Other Intangibles | The intangible assets acquired from the acquisitions were as follows as of the acquisition date ( in millions, except for weighted average amortization periods ): Preliminary fair value at the acquisition date Weighted average amortization period NeoPhotonics IPG product lines Total acquired Acquired developed technologies $ 220.0 $ 8.6 $ 228.6 5.2 Customer relationships 144.5 2.3 146.8 5.9 In-process research and development 48.0 29.1 77.1 n/a Total intangible assets $ 412.5 $ 40.0 $ 452.5 The following tables present details of our other intangibles, including those acquired in connection with our acquisitions in the first quarter of fiscal 2023, as of the periods presented ( in millions, except for weighted average remaining amortization period ): December 31, 2022 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Weighted average remaining amortization period (years) Acquired developed technologies $ 618.9 $ (352.3) $ 266.6 4.3 Customer relationships 291.8 (95.6) 196.2 5.1 In-process research and development 77.1 — 77.1 n/a Total intangible assets $ 987.8 $ (447.9) $ 539.9 July 2, 2022 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Weighted average remaining amortization period (years) Acquired developed technologies $ 390.3 $ (303.6) $ 86.7 2.5 Customer relationships 145.0 (76.0) 69.0 4.4 Total intangible assets $ 535.3 $ (379.6) $ 155.7 |
Schedule of Amortization Expense | The following table presents details of amortization for the periods presented (in millions ): Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Cost of sales $ 24.8 $ 15.9 $ 47.7 $ 31.7 Selling, general and administrative 11.3 5.6 20.6 11.2 Total amortization of intangibles $ 36.1 $ 21.5 $ 68.3 $ 42.9 |
Schedule of Estimated Future Amortization Expense | Based on the carrying amount of our acquired developed technologies and customer relationships as of December 31, 2022, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows (in millions) : Fiscal Years Remainder of 2023 $ 57.5 2024 110.2 2025 97.3 2026 84.9 2027 73.0 Thereafter 39.9 Total future amortization $ 462.8 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes | Our convertible notes consisted of the following components as of the periods presented ( in millions ): Liability component: December 31, 2022 July 2, 2022 2024 Notes (1) 2026 Notes (2) 2028 Notes (3) 2024 Notes (1) 2026 Notes (2) 2028 Notes (3) Principal $ 448.1 $ 1,050.0 $ 861.0 $ 448.1 $ 1,050.0 $ 861.0 Unamortized debt discount and issuance costs (27.4) (4.7) (6.0) (38.2) (218.6) (226.3) Net carrying amount of the liability component $ 420.7 $ 1,045.3 $ 855.0 $ 409.9 $ 831.4 $ 634.7 (1) If the closing price of our stock exceeds $78.80 (or 130% of the conversion price of $60.62) for 20 of the last 30 trading days of any future fiscal quarter, our 2024 Notes would become convertible at the option of the holders during the next fiscal quarter. During the fourth quarter of fiscal 2022, the 2024 Notes were convertible at the option of the holders and therefore, the debt component of our 2024 Notes was classified as current liabilities in our condensed consolidated balance sheet. Although the 2024 Notes will not be convertible during the third quarter of fiscal 2023 due to our stock price not exceeding $78.80 for 20 of the last 30 trading days of the quarter ended December 31, 2022, we continue to classify the 2024 Notes in current liabilities, as holders may convert their 2024 Notes at any time on or after December 15, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date. (2) If the closing price of our stock exceeds $129.08 (or 130% of the conversion price of $99.29) for 20 of the last 30 trading days of any future fiscal quarter, our 2026 Notes would become convertible at the option of the holders during the subsequent fiscal quarter and the debt would be reclassified to current liabilities in our condensed consolidated balance sheet. (3) If the closing price of our stock exceeds $170.34 (or 130% of the conversion price of $131.03) for 20 of the last 30 trading days of any future fiscal quarter, our 2028 Notes would become convertible at the option of the holders during the subsequent fiscal quarter and the debt would be reclassified to current liabilities in our condensed consolidated balance sheet. |
Schedule of Interest Expense | The following table sets forth interest expense information related to the convertible notes for the periods presented (in millions) : Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Contractual interest expense $ 2.7 $ 1.6 $ 5.4 $ 3.2 Amortization of the debt discount and debt issuance costs 6.2 15.5 11.9 30.8 Total interest expense $ 8.9 $ 17.1 $ 17.3 $ 34.0 |
Schedule of Future Interest and Principal Payments Related to Debts | The future interest and principal payments related to our convertible notes are as follows as of December 31, 2022 (in millions) : Fiscal Years 2024 Notes 2026 Notes 2028 Notes Total Remainder of 2023 $ 0.6 $ 2.6 $ 2.2 $ 5.4 2024 449.2 5.3 4.3 458.8 2025 — 5.3 4.3 9.6 2026 — 5.3 4.3 9.6 2027 and thereafter — 1,052.4 869.6 1,922.0 Total convertible notes payments $ 449.8 $ 1,070.9 $ 884.7 $ 2,405.4 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss) were as follows for the periods as presented ( in millions ): Foreign currency translation adjustments, net of tax (1) Defined benefit obligations, net of tax (2) Unrealized gain (loss) on available-for-sale securities, net of tax Total Beginning balance as of July 2, 2022 $ 9.7 $ 1.0 $ (10.3) $ 0.4 Other comprehensive loss — — (0.6) (0.6) Ending balance as of October 1, 2022 9.7 1.0 (10.9) (0.2) Other comprehensive gain — — 3.6 3.6 Ending balance as of December 31, 2022 $ 9.7 $ 1.0 $ (7.3) $ 3.4 Foreign currency translation adjustments, net of tax (1) Defined benefit obligations, net of tax (2) Unrealized gain (loss) on available-for-sale securities, net of tax Total Beginning balance as of July 3, 2021 $ 9.7 $ (1.4) $ (0.1) $ 8.2 Other comprehensive income — — 0.3 0.3 Ending balance as of October 2, 2021 9.7 (1.4) 0.2 8.5 Other comprehensive loss — — (2.3) (2.3) Ending balance as of January 1, 2022 $ 9.7 $ (1.4) $ (2.1) $ 6.2 (1) In fiscal 2019, we established the functional currency for our worldwide operations as the U.S. dollar. Translation adjustments reported prior to December 10, 2018 remain as a component of accumulated other comprehensive income (loss) in our condensed consolidated balance sheets, until all or a part of the investment in the subsidiaries is sold or liquidated. (2) We re-evaluate the assumptions related to the fair value of our defined benefit obligations annually and make any updates as necessary. |
Restructuring and Related Cha_2
Restructuring and Related Charges (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Activity of Restructuring and Related Charges | The following table summarizes the activity of restructuring and related charges for the periods as presented ( in millions ): Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Balance as of beginning of period $ 3.1 $ 0.8 $ — $ 5.7 Charges (reversals), net 13.9 0.1 23.2 (1.0) Payments (2.9) (0.6) (9.1) (4.4) Balance as of end of period $ 14.1 $ 0.3 $ 14.1 $ 0.3 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Impact on Results of Operations of Recording Stock-Based Compensation by Function | The impact on our results of operations of recording stock-based compensation by function for the periods presented was as follows (in millions) : Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Cost of sales $ 6.7 $ 5.2 $ 12.2 $ 9.8 Research and development 10.6 5.4 20.2 10.4 Selling, general and administrative 19.3 16.7 50.8 31.9 Total stock-based compensation $ 36.6 $ 27.3 $ 83.2 $ 52.1 |
Schedule of Income Tax Benefit Associated with Stock-Based Compensation | Total income tax benefit associated with stock-based compensation recognized in our condensed consolidated statements of operations during the years presented was as follows (in millions) : Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Income tax benefit associated with stock-based compensation $ 6.4 $ 4.2 $ 11.5 $ 8.2 |
Schedule of Awards Activity | The following table summarizes our award activity for the three and six months ended December 31, 2022 (in millions, except per share amounts) : Restricted Stock Units Performance Stock Units Number of Shares Weighted-Average Grant Date Fair Value per Share Number of Shares Weighted-Average Grant Date Fair Value per Share Balance as of July 2, 2022 2.0 $ 85.9 0.3 $ 81.9 Replacement Awards Issued 0.4 93.4 — — Granted 1.6 86.9 0.6 88.2 Vested (0.7) 83.9 (0.1) 70.5 Canceled (0.2) 88.1 (0.1) 88.6 Balance as of December 31, 2022 3.1 $ 87.8 0.7 $ 89.3 |
Schedule of Awards Available for Grant | A summary of awards available for grant is as follows (in millions) : Awards Available for Grant Balance as of July 2, 2022 3.8 Assumed in connection with NeoPhotonics merger 0.4 Replacement Awards (0.4) Authorized 0.9 Granted (2.2) Canceled 0.3 Balance as of December 31, 2022 2.8 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Changes in Warranty Reserve | The following table presents the changes in our warranty reserve for the periods presented ( in millions ): Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Balance as of beginning of period $ 10.1 $ 5.1 $ 10.0 $ 5.0 Warranties assumed in NeoPhotonics merger — — 0.7 — Provision for warranty 2.8 3.8 4.3 5.5 Utilization of reserve (4.5) (0.3) (6.6) (1.9) Balance as of end of period $ 8.4 $ 8.6 $ 8.4 $ 8.6 |
Operating Segments and Geogra_2
Operating Segments and Geographic Information (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Information on Reportable Segments | Information on reportable segments utilized by our CODM is as follows ( in millions) : Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Net revenue: OpComms $ 448.8 $ 397.4 $ 902.2 $ 803.4 Lasers 57.2 49.3 110.6 91.7 Net revenue $ 506.0 $ 446.7 $ 1,012.8 $ 895.1 Gross profit: OpComms $ 197.0 $ 201.8 $ 413.0 $ 427.7 Lasers 30.0 26.2 58.1 47.0 Total segment gross profit 227.0 228.0 471.1 474.7 Unallocated corporate items: Stock-based compensation (6.7) (5.2) (12.2) (9.8) Amortization of acquired intangibles (24.8) (15.9) (47.7) (31.7) Amortization of acquired inventory fair value adjustments (9.6) — (14.2) — Inventory and fixed asset write down due to product line exits — (0.1) — (0.1) Integration related costs (2.8) — (2.8) — Other (charges) gains, net (1) (16.9) 0.7 (26.8) 6.6 Gross profit $ 166.2 $ 207.5 $ 367.4 $ 439.7 (1) Other (charges) gains of unallocated corporate items for the three and six months ended December 31, 2022 primarily relate to $11.7 million and $19.0 million of charges to acquire components from various brokers to satisfy customer demand. |
Schedule of Revenue by Geographic Region | The following table presents net revenue by the three geographic regions we operate in and net revenue from countries that generally represented 10% or more of our total net revenue (in millions, except percentage data): Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 Amount % of Total Amount % of Total Amount % of Total Amount % of Total Net revenue: Americas: United States $ 65.5 12.9 % $ 51.0 11.4 % $ 127.7 12.6 % $ 79.1 8.8 % Mexico 59.5 11.8 38.3 8.6 117.0 11.6 71.3 8.0 Other Americas 3.8 0.8 2.7 0.6 6.1 0.6 4.7 0.5 Total Americas $ 128.8 25.5 % $ 92.0 20.6 % $ 250.8 24.8 % $ 155.1 17.3 % Asia-Pacific: Hong Kong $ 65.9 13.0 % $ 115.0 25.8 % $ 143.5 14.2 % $ 257.3 28.8 % South Korea 52.0 10.3 77.9 17.4 119.7 11.8 183.0 20.4 Japan 50.8 10.0 46.7 10.5 95.6 9.4 92.8 10.4 Thailand 77.9 15.4 26.2 5.9 135.4 13.4 43.3 4.8 Other Asia-Pacific 84.7 16.7 59.7 13.4 173.6 17.1 108.6 12.1 Total Asia-Pacific $ 331.3 65.4 % $ 325.5 73.0 % $ 667.8 65.9 % $ 685.0 76.4 % EMEA $ 45.9 9.1 % $ 29.2 6.5 % $ 94.2 9.3 % $ 55.0 6.1 % Total net revenue $ 506.0 $ 446.7 $ 1,012.8 $ 895.1 |
Schedule of Long-Lived Assets by Geographic Region | Long-lived assets, namely property, plant and equipment, net, were identified based on the physical location of the assets in the corresponding geographic areas as of the periods indicated (in millions) : December 31, 2022 July 2, 2022 Property, plant and equipment, net United States $ 131.2 $ 107.8 Thailand 131.7 107.6 Japan 94.2 38.9 China 52.2 32.7 Other countries 78.4 73.5 Total property, plant and equipment, net $ 487.7 $ 360.5 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Dec. 31, 2022 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of Concentration Risks | The table below discloses our total net revenue attributable to each of our two reportable segments. In addition, the table sets forth the percentage of our total net revenue attributable to our product offerings that serve Telecom and Datacom, and Consumer and Industrial markets, which accounted for 10% or more of our total net revenue during the periods presented ( in millions, except percentage data ): Three Months Ended Six Months Ended December 31, 2022 January 1, 2022 December 31, 2022 January 1, 2022 OpComms: Telecom and Datacom $ 384.2 75.9 % $ 267.1 59.8 % $ 744.3 73.5 % $ 483.1 54.0 % Industrial and Consumer 64.6 12.8 % 130.3 29.2 % 157.9 15.6 % 320.3 35.8 % Total OpComms $ 448.8 88.7 % $ 397.4 89.0 % $ 902.2 89.1 % $ 803.4 89.8 % Lasers 57.2 11.3 % 49.3 11.0 % 110.6 10.9 % 91.7 10.2 % Net Revenue $ 506.0 $ 446.7 $ 1,012.8 $ 895.1 |
Schedule of Changes in Contract Balances | The following table reflects the changes in contract balances for the periods presented ( in millions, except percentages ): Contract balances Balance sheet location December 31, 2022 July 2, 2022 Change Percentage Change Accounts receivable, net Accounts receivable, net $ 330.5 $ 262.0 $ 68.5 26.1 % Deferred revenue and customer deposits Other current liabilities $ 1.3 $ — $ 1.3 n/a |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 6 Months Ended | |
Dec. 31, 2022 | Jan. 01, 2022 | |
Business Acquisition | ||
Increase in inventories | $ 36.4 | $ 11 |
Unusual or Infrequent Item, or Both | ||
Business Acquisition | ||
Increase in inventories | $ 18 |
Recently Issued Accounting Pr_3
Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Jul. 03, 2022 | Jul. 02, 2022 |
New Accounting Pronouncements or Change in Accounting Principle | |||
Additional paid-in capital | $ (1,641.4) | $ (1,577.1) | $ (2,003.6) |
Deferred tax asset | 100.1 | 27 | |
Accumulated deficit | $ (101.3) | (43.5) | $ (129.1) |
Cumulative Effect, Period of Adoption, Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Long-term debt | 433 | ||
Additional paid-in capital | 426.5 | ||
Deferred tax asset | 92.1 | ||
Accumulated deficit | $ (85.6) |
Recently Issued Accounting Pr_4
Recently Issued Accounting Pronouncements- Accounting Standard Update (Details) - USD ($) $ in Millions | Jul. 03, 2022 | Dec. 31, 2022 | Jul. 02, 2022 |
New Accounting Pronouncements or Change in Accounting Principle | |||
Additional paid-in capital | $ 1,577.1 | $ 1,641.4 | $ 2,003.6 |
Accumulated deficit | 43.5 | $ 101.3 | 129.1 |
Deferred Tax Asset (Liability), net | 105 | 12.9 | |
Short Term Debt - 2024 Notes | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Short-term debt | 409.9 | 409.9 | |
Long Term Debt - 2026 Notes | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Long-term debt | 1,044.8 | 831.4 | |
Long Term Debt - 2028 Notes | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Long-term debt | 854.3 | 634.7 | |
Cumulative Effect, Period of Adoption, Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Long-term debt | 433 | ||
Additional paid-in capital | (426.5) | ||
Accumulated deficit | 85.6 | ||
Cumulative Effect, Period of Adoption, Adjustment | Adjustment for interest accretion | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Accumulated deficit | (109.2) | ||
Cumulative Effect, Period of Adoption, Adjustment | Adjustment for interest accretion | Long Term Debt - 2026 Notes | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Adjustment for interest accretion | (99.5) | ||
Cumulative Effect, Period of Adoption, Adjustment | Adjustment for interest accretion | Long Term Debt - 2028 Notes | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Adjustment for interest accretion | $ (9.7) | ||
Cumulative Effect, Period of Adoption, Adjustment | Tax effect | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Additional paid-in capital | 115.7 | ||
Accumulated deficit | 23.6 | ||
Deferred Tax Asset (Liability), net | 92.1 | ||
Reclassify amounts from equity to debt | Cumulative Effect, Period of Adoption, Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Additional paid-in capital | (542.2) | ||
Reclassify amounts from equity to debt | Cumulative Effect, Period of Adoption, Adjustment | Long Term Debt - 2026 Notes | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Long-term debt | 312.9 | ||
Reclassify amounts from equity to debt | Cumulative Effect, Period of Adoption, Adjustment | Long Term Debt - 2028 Notes | |||
New Accounting Pronouncements or Change in Accounting Principle | |||
Long-term debt | $ 229.3 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2022 | Oct. 01, 2022 | Jan. 01, 2022 | Oct. 02, 2021 | Dec. 31, 2022 | Jan. 01, 2022 | |
Numerator: | ||||||
Net Income (Loss) Attributable to Parent | $ (31.7) | $ (0.4) | $ 56.7 | $ 81.5 | $ (32.1) | $ 138.2 |
Net Income - Basic | (31.7) | 56.7 | (32.1) | 138.2 | ||
Net Income - Diluted | $ (31.7) | $ 56.7 | $ (32.1) | $ 138.2 | ||
Denominator: | ||||||
Weighted average common shares outstanding - basic (in shares) | 68.3 | 72.3 | 68.2 | 72.5 | ||
Effect of dilutive securities from stock-based benefit plans (in shares) | 0 | 0.5 | 0 | 0.6 | ||
Shares issuable assuming conversion of the convertible notes (in shares) | 0 | 2.5 | 0 | 2.3 | ||
Weighted average common shares outstanding - diluted (in shares) | 68.3 | 75.3 | 68.2 | 75.4 | ||
Net income (loss) per share: | ||||||
Basic (in usd per share) | $ (0.46) | $ 0.78 | $ (0.47) | $ 1.91 | ||
Diluted (in usd per share) | $ (0.46) | $ 0.75 | $ (0.47) | $ 1.83 |
Earnings Per Share - Anti-dilut
Earnings Per Share - Anti-dilutive Potential Shares (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive shares (in shares) | 0.2 | |||
Convertible Debt Securities | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive shares (in shares) | 24.5 | 24.5 | ||
Restricted Stock Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive shares (in shares) | 3.8 | 0.1 | 3.9 | 0.4 |
Restricted Stock Units | 2015 Purchase Plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive shares (in shares) | 0.1 | |||
PSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive shares (in shares) | 3.8 | 3.9 |
Business Combinations - Conside
Business Combinations - Consideration Transferred (Details) - USD ($) $ / shares in Units, shares in Millions | 6 Months Ended | 12 Months Ended | |||||
Aug. 03, 2022 | Aug. 01, 2022 | Jul. 03, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | Jul. 02, 2022 | Jan. 14, 2022 | |
Business Acquisition | |||||||
Settlement of pre-existing relationship (loan to NeoPhotonics) | $ 50,000,000 | $ 0 | |||||
NeoPhotonics | |||||||
Business Acquisition | |||||||
Term loan funding provided to NeoPhotonics | $ 20,000,000 | $ 30,000,000 | |||||
NeoPhotonics | |||||||
Business Acquisition | |||||||
Maximum borrowing capacity (up to) | $ 50,000,000 | ||||||
PSUs | 2015 Plan | |||||||
Business Acquisition | |||||||
Fair value | $ 40,200,000 | $ 26,000,000 | |||||
Employee | PSUs | 2015 Plan | |||||||
Business Acquisition | |||||||
Fair value | $ 3,500,000 | ||||||
NeoPhotonics | |||||||
Business Acquisition | |||||||
Cash consideration for outstanding NeoPhotonics common stock | $ 867,300,000 | ||||||
Settlement of pre-existing relationship (loan to NeoPhotonics) | 50,000,000 | ||||||
Stock-based compensation | 17,100,000 | ||||||
Total purchase price consideration | $ 934,400,000 | ||||||
Per share consideration price (in usd per share) | $ 16 | ||||||
Shares acquired (shares) | 54.2 | ||||||
Consideration paid to settle outstanding stock award | $ 22,600,000 | ||||||
Expenses recognized | 9,000,000 | ||||||
NeoPhotonics | Replacement Award | |||||||
Business Acquisition | |||||||
Total purchase price consideration | $ 13,600,000 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Aug. 15, 2022 | Aug. 03, 2022 | Dec. 31, 2022 | Dec. 31, 2022 | Jul. 02, 2022 | |
Business Acquisition | |||||
Goodwill | $ 698.2 | $ 698.2 | $ 368.9 | ||
Acquired developed technologies | |||||
Business Acquisition | |||||
Acquired finite lived intangible assets | 228.6 | ||||
Customer relationships | |||||
Business Acquisition | |||||
Acquired finite lived intangible assets | 146.8 | ||||
OpComms | |||||
Business Acquisition | |||||
Goodwill | 692.8 | 692.8 | 363.5 | ||
NeoPhotonics | |||||
Business Acquisition | |||||
Total purchase price consideration | $ 934.4 | ||||
Transaction cost | 22.1 | $ 8.3 | |||
Goodwill | 318.4 | ||||
Net revenue from date of acquisition | 104.6 | 177.4 | |||
Other non-current assets | 1.9 | ||||
Other non-current liabilities | $ 28.2 | ||||
NeoPhotonics | Acquired developed technologies | |||||
Business Acquisition | |||||
Acquired finite lived intangible assets | 220 | ||||
NeoPhotonics | Customer relationships | |||||
Business Acquisition | |||||
Acquired finite lived intangible assets | 144.5 | ||||
NeoPhotonics | Selling, general and administrative | |||||
Business Acquisition | |||||
Transaction cost | 1.2 | 13.8 | |||
IPG product lines | |||||
Business Acquisition | |||||
Total purchase price consideration | $ 55.9 | ||||
Transaction cost | $ 0.1 | 1.5 | |||
Other non-current assets | 5 | ||||
Other non-current liabilities | 5 | ||||
IPG product lines | In-process research and development | |||||
Business Acquisition | |||||
Acquired finite lived intangible assets | 29.1 | ||||
IPG product lines | Acquired developed technologies | |||||
Business Acquisition | |||||
Acquired finite lived intangible assets | 8.6 | 8.6 | |||
IPG product lines | Customer relationships | |||||
Business Acquisition | |||||
Acquired finite lived intangible assets | 2.3 | $ 2.3 | |||
IPG product lines | OpComms | |||||
Business Acquisition | |||||
Goodwill | $ 10.9 |
Business Combinations - Assets
Business Combinations - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Aug. 03, 2022 | Dec. 31, 2022 | Jul. 02, 2022 |
Liabilities assumed | |||
Goodwill | $ 698.2 | $ 368.9 | |
NeoPhotonics | |||
Business Acquisition | |||
Total purchase price consideration | $ 934.4 | ||
Assets acquired | |||
Cash and cash equivalents | 92.9 | ||
Accounts receivable, net | 66.5 | ||
Inventories | 84.3 | ||
Prepayments and other current assets | 24.2 | ||
Property, plant and equipment, net | 106.1 | ||
Operating lease right-of-use assets, net | 16.9 | ||
Other intangible assets, net | 412.5 | ||
Deferred tax asset | 0.1 | ||
Other non-current assets | 1.9 | ||
Total assets | 805.4 | ||
Liabilities assumed | |||
Accounts payable | 79.6 | ||
Accrued payroll and related expenses | 11.1 | ||
Accrued expenses | 4.1 | ||
Other current liabilities | 10.6 | ||
Operating lease liabilities, current | 2.8 | ||
Operating lease liabilities, non-current | 13.2 | ||
Deferred tax liability | 39.8 | ||
Other non-current liabilities | 28.2 | ||
Total liabilities | 189.4 | ||
Goodwill | 318.4 | ||
NeoPhotonics | Customer relationships | |||
Assets acquired | |||
Other intangible assets, net | 144.5 | ||
NeoPhotonics | Acquired developed technologies | |||
Assets acquired | |||
Other intangible assets, net | 220 | ||
NeoPhotonics | In-process research and development | |||
Assets acquired | |||
Other intangible assets, net | $ 48 |
Business Combinations - Pro For
Business Combinations - Pro Forma Information (Details) - NeoPhotonics - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Business Acquisition | ||||
Net revenue | $ 506 | $ 527.3 | $ 1,036.7 | $ 1,059.4 |
Net income (loss) | $ (25.8) | $ 22.8 | $ 6.6 | $ 45 |
Cash, Cash Equivalents and Sh_3
Cash, Cash Equivalents and Short-term Investments - Summary of Cash, Cash Equivalents and Short-term Investments (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Jul. 02, 2022 |
Cash and cash equivalents: | ||
Cash | $ 383.3 | $ 235.9 |
Cash and cash equivalents | 592.1 | 1,290.2 |
Short-term investments: | ||
Amortized Cost | 1,097.6 | 1,271.9 |
Gross Unrealized Gains | 0.1 | 0.3 |
Gross Unrealized Losses | (9.4) | (13.4) |
Fair Value | 1,088.3 | 1,258.8 |
Certificates of deposit | ||
Short-term investments: | ||
Amortized Cost | 27.6 | 28.3 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 27.6 | 28.3 |
Commercial paper | ||
Short-term investments: | ||
Amortized Cost | 88 | 107.4 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (0.2) | (0.4) |
Fair Value | 87.8 | 107 |
Corporate debt securities | ||
Short-term investments: | ||
Amortized Cost | 504.2 | 539.9 |
Gross Unrealized Gains | 0.1 | |
Gross Unrealized Losses | (4.8) | (7.4) |
Fair Value | 499.5 | 532.5 |
Municipal bonds | ||
Short-term investments: | ||
Amortized Cost | 1 | 1 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 1 | 1 |
Foreign government bonds | ||
Short-term investments: | ||
Amortized Cost | 1.4 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 1.4 | |
U.S. Agency securities | ||
Short-term investments: | ||
Amortized Cost | 130.5 | 67.1 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1.6) | (1.4) |
Fair Value | 128.9 | 65.7 |
U.S. Treasury securities | ||
Short-term investments: | ||
Amortized Cost | 344.9 | 528.2 |
Gross Unrealized Gains | 0 | 0.3 |
Gross Unrealized Losses | (2.8) | (4.2) |
Fair Value | 342.1 | 524.3 |
Commercial paper | ||
Cash and cash equivalents: | ||
Cash equivalents: | 4.8 | 23.6 |
Money market funds | ||
Cash and cash equivalents: | ||
Cash equivalents: | 180.1 | 1,000.2 |
U.S. Agency securities | ||
Cash and cash equivalents: | ||
Cash equivalents: | 8 | |
U.S. Treasury securities | ||
Cash and cash equivalents: | ||
Cash equivalents: | $ 23.9 | $ 22.5 |
Cash, Cash Equivalents and Sh_4
Cash, Cash Equivalents and Short-term Investments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | Jul. 02, 2022 | |
Cash and Cash Equivalents [Abstract] | |||||
Other nonoperating income (expense) | $ 3.7 | $ 1 | $ 17.5 | $ 1.6 | |
Income on short-term investments and cash equivalents | 7.7 | $ 0.6 | 12.5 | $ 1.2 | |
Interest receivable in prepayments and other current assets | 5.3 | 5.3 | $ 3.9 | ||
Cash and Cash Equivalents | |||||
Unrealized losses, greater than 12 months | 6.5 | 6.5 | 0.9 | ||
Gross Unrealized Losses | 9.4 | 9.4 | 13.4 | ||
Corporate debt securities | |||||
Cash and Cash Equivalents | |||||
Unrealized losses, greater than 12 months | 3 | 3 | 0.9 | ||
Gross Unrealized Losses | 4.8 | 4.8 | 7.4 | ||
U.S. government bonds | |||||
Cash and Cash Equivalents | |||||
Unrealized losses, greater than 12 months | 2.4 | 2.4 | 0 | ||
Gross Unrealized Losses | 2.8 | 2.8 | 4.2 | ||
U.S. Agency securities | |||||
Cash and Cash Equivalents | |||||
Unrealized losses, greater than 12 months | 1.1 | 1.1 | 0 | ||
Gross Unrealized Losses | $ 1.6 | $ 1.6 | $ 1.4 |
Cash, Cash Equivalents and Sh_5
Cash, Cash Equivalents and Short-term Investments - Summary of Unrealized Losses (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Jul. 02, 2022 |
Cash and Cash Equivalents | ||
Fair Value, More Than 12 Months | $ 478.9 | $ 57.4 |
Fair Value, Less Than 12 Months | 437.9 | 1,060.8 |
Unrealized Losses | ||
Unrealized Losses, More Than 12 Months | (6.5) | (0.9) |
Unrealized Losses, Less Than 12 Months | (2.9) | (12.5) |
Gross Unrealized Losses | 9.4 | 13.4 |
U.S. Agency securities | ||
Cash and Cash Equivalents | ||
Fair Value, More Than 12 Months | 45.9 | 0 |
Fair Value, Less Than 12 Months | 83 | 73.7 |
Unrealized Losses | ||
Unrealized Losses, More Than 12 Months | (1.1) | 0 |
Unrealized Losses, Less Than 12 Months | (0.5) | (1.4) |
Gross Unrealized Losses | 1.6 | 1.4 |
Certificates of deposit | ||
Cash and Cash Equivalents | ||
Fair Value, More Than 12 Months | 0 | 0 |
Fair Value, Less Than 12 Months | 5.7 | 16.2 |
Unrealized Losses | ||
Unrealized Losses, More Than 12 Months | 0 | 0 |
Unrealized Losses, Less Than 12 Months | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Commercial paper | ||
Cash and Cash Equivalents | ||
Fair Value, More Than 12 Months | 0 | 0 |
Fair Value, Less Than 12 Months | 73.4 | 130.7 |
Unrealized Losses | ||
Unrealized Losses, More Than 12 Months | 0 | 0 |
Unrealized Losses, Less Than 12 Months | (0.2) | (0.4) |
Gross Unrealized Losses | 0.2 | 0.4 |
Corporate debt securities | ||
Cash and Cash Equivalents | ||
Fair Value, More Than 12 Months | 283.9 | 57.4 |
Fair Value, Less Than 12 Months | 176.2 | 473.2 |
Unrealized Losses | ||
Unrealized Losses, More Than 12 Months | (3) | (0.9) |
Unrealized Losses, Less Than 12 Months | (1.8) | (6.5) |
Gross Unrealized Losses | 4.8 | 7.4 |
Foreign government bonds | ||
Cash and Cash Equivalents | ||
Fair Value, More Than 12 Months | 0 | |
Fair Value, Less Than 12 Months | 1.4 | |
Unrealized Losses | ||
Unrealized Losses, More Than 12 Months | 0 | |
Unrealized Losses, Less Than 12 Months | 0 | |
Gross Unrealized Losses | 0 | |
Municipal bonds | ||
Cash and Cash Equivalents | ||
Fair Value, More Than 12 Months | 1 | 0 |
Fair Value, Less Than 12 Months | 0 | 1 |
Unrealized Losses | ||
Unrealized Losses, More Than 12 Months | 0 | 0 |
Unrealized Losses, Less Than 12 Months | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
U.S. government bonds | ||
Cash and Cash Equivalents | ||
Fair Value, More Than 12 Months | 148.1 | 0 |
Fair Value, Less Than 12 Months | 98.2 | 366 |
Unrealized Losses | ||
Unrealized Losses, More Than 12 Months | (2.4) | 0 |
Unrealized Losses, Less Than 12 Months | (0.4) | (4.2) |
Gross Unrealized Losses | $ 2.8 | $ 4.2 |
Cash, Cash Equivalents and Sh_6
Cash, Cash Equivalents and Short-term Investments - Investments in Debt Securities by Contractual Maturities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Jul. 02, 2022 |
Amortized Cost | ||
Due in 1 year | $ 879.5 | $ 1,010.9 |
Due in 1 year through 5 years | 218.1 | 261 |
Total | 1,097.6 | 1,271.9 |
Fair Value | ||
Due in 1 year | 871.6 | 1,002.2 |
Due in 1 year through 5 years | 216.7 | 256.6 |
Total | $ 1,088.3 | $ 1,258.8 |
Fair Value Measurements - Measu
Fair Value Measurements - Measured on a Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Jul. 02, 2022 |
Assets: | ||
Short-term investment, fair value disclosure | $ 1,088.3 | $ 1,258.8 |
Cash held in bank | 383.3 | 235.9 |
Certificates of deposit | ||
Assets: | ||
Short-term investment, fair value disclosure | 27.6 | 28.3 |
Commercial paper | ||
Assets: | ||
Short-term investment, fair value disclosure | 87.8 | 107 |
Corporate debt securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 499.5 | 532.5 |
Municipal bonds | ||
Assets: | ||
Short-term investment, fair value disclosure | 1 | 1 |
Foreign government bonds | ||
Assets: | ||
Short-term investment, fair value disclosure | 1.4 | |
U.S. Agency securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 128.9 | 65.7 |
U.S. Treasury securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 342.1 | 524.3 |
Recurring basis | ||
Assets: | ||
Total assets, fair value disclosure | 1,297.1 | 2,313.1 |
Recurring basis | Certificates of deposit | ||
Assets: | ||
Short-term investment, fair value disclosure | 27.6 | 28.3 |
Recurring basis | Commercial paper | ||
Assets: | ||
Short-term investment, fair value disclosure | 87.8 | 107 |
Recurring basis | Corporate debt securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 499.5 | 532.5 |
Recurring basis | Municipal bonds | ||
Assets: | ||
Short-term investment, fair value disclosure | 1 | 1 |
Recurring basis | Foreign government bonds | ||
Assets: | ||
Short-term investment, fair value disclosure | 1.4 | |
Recurring basis | U.S. Agency securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 128.9 | 65.7 |
Recurring basis | U.S. Treasury securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 342.1 | 524.3 |
Recurring basis | Commercial paper | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 4.8 | 23.6 |
Recurring basis | Money market funds | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 180.1 | 1,000.2 |
Recurring basis | U.S. Agency securities | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 8 | |
Recurring basis | U.S. Treasury securities | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 23.9 | 22.5 |
Recurring basis | Level 1 | ||
Assets: | ||
Total assets, fair value disclosure | 546.1 | 1,547 |
Recurring basis | Level 1 | Certificates of deposit | ||
Assets: | ||
Short-term investment, fair value disclosure | 0 | 0 |
Recurring basis | Level 1 | Commercial paper | ||
Assets: | ||
Short-term investment, fair value disclosure | 0 | 0 |
Recurring basis | Level 1 | Corporate debt securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 0 | 0 |
Recurring basis | Level 1 | Municipal bonds | ||
Assets: | ||
Short-term investment, fair value disclosure | 0 | 0 |
Recurring basis | Level 1 | Foreign government bonds | ||
Assets: | ||
Short-term investment, fair value disclosure | 0 | |
Recurring basis | Level 1 | U.S. Agency securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 0 | 0 |
Recurring basis | Level 1 | U.S. Treasury securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 342.1 | 524.3 |
Recurring basis | Level 1 | Commercial paper | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 0 | 0 |
Recurring basis | Level 1 | Money market funds | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 180.1 | 1,000.2 |
Recurring basis | Level 1 | U.S. Agency securities | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 0 | |
Recurring basis | Level 1 | U.S. Treasury securities | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 23.9 | 22.5 |
Recurring basis | Level 2 | ||
Assets: | ||
Total assets, fair value disclosure | 751 | 766.1 |
Recurring basis | Level 2 | Certificates of deposit | ||
Assets: | ||
Short-term investment, fair value disclosure | 27.6 | 28.3 |
Recurring basis | Level 2 | Commercial paper | ||
Assets: | ||
Short-term investment, fair value disclosure | 87.8 | 107 |
Recurring basis | Level 2 | Corporate debt securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 499.5 | 532.5 |
Recurring basis | Level 2 | Municipal bonds | ||
Assets: | ||
Short-term investment, fair value disclosure | 1 | 1 |
Recurring basis | Level 2 | Foreign government bonds | ||
Assets: | ||
Short-term investment, fair value disclosure | 1.4 | |
Recurring basis | Level 2 | U.S. Agency securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 128.9 | 65.7 |
Recurring basis | Level 2 | U.S. Treasury securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 0 | 0 |
Recurring basis | Level 2 | Commercial paper | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 4.8 | 23.6 |
Recurring basis | Level 2 | Money market funds | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 0 | 0 |
Recurring basis | Level 2 | U.S. Agency securities | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 8 | |
Recurring basis | Level 2 | U.S. Treasury securities | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 0 | 0 |
Recurring basis | Level 3 | ||
Assets: | ||
Total assets, fair value disclosure | 0 | 0 |
Recurring basis | Level 3 | Certificates of deposit | ||
Assets: | ||
Short-term investment, fair value disclosure | 0 | 0 |
Recurring basis | Level 3 | Commercial paper | ||
Assets: | ||
Short-term investment, fair value disclosure | 0 | 0 |
Recurring basis | Level 3 | Corporate debt securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 0 | 0 |
Recurring basis | Level 3 | Municipal bonds | ||
Assets: | ||
Short-term investment, fair value disclosure | 0 | 0 |
Recurring basis | Level 3 | Foreign government bonds | ||
Assets: | ||
Short-term investment, fair value disclosure | 0 | |
Recurring basis | Level 3 | U.S. Agency securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 0 | 0 |
Recurring basis | Level 3 | U.S. Treasury securities | ||
Assets: | ||
Short-term investment, fair value disclosure | 0 | 0 |
Recurring basis | Level 3 | Commercial paper | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 0 | 0 |
Recurring basis | Level 3 | Money market funds | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 0 | 0 |
Recurring basis | Level 3 | U.S. Agency securities | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | 0 | |
Recurring basis | Level 3 | U.S. Treasury securities | ||
Assets: | ||
Cash and cash equivalents, fair value disclosure | $ 0 | $ 0 |
Fair Value Measurements - Not R
Fair Value Measurements - Not Recorded at Fair Value on a Recurring Basis Convertible Debt (Details) - Convertible Debt - USD ($) $ in Millions | Dec. 31, 2022 | Jul. 02, 2022 | Mar. 31, 2022 | Dec. 31, 2019 |
Level 2 | Carrying Amount | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | $ 2,321 | $ 1,876 | ||
Level 2 | Estimated Fair Value | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | 2,040.3 | 2,414.9 | ||
2028 Notes | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | $ 629.8 | |||
2028 Notes | Level 2 | Carrying Amount | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | 855 | 634.7 | ||
2028 Notes | Level 2 | Estimated Fair Value | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | 659.7 | 735.7 | ||
2026 Notes | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | $ 734.8 | |||
2026 Notes | Level 2 | Carrying Amount | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | 1,045.3 | 831.4 | ||
2026 Notes | Level 2 | Estimated Fair Value | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | 907.4 | 1,065 | ||
2024 Notes | Level 2 | Carrying Amount | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | 420.7 | 409.9 | ||
2024 Notes | Level 2 | Estimated Fair Value | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | $ 473.2 | $ 614.2 |
Balance Sheet Details - Account
Balance Sheet Details - Accounts Receivable Allowances (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Jul. 02, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivable allowance for credit losses | $ 0.1 | $ 0.1 |
Balance Sheet Details - Invento
Balance Sheet Details - Inventories (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | Jul. 02, 2022 | |
Inventory, Net | ||||
Raw materials and purchased parts | $ 166.2 | $ 166.2 | $ 98.9 | |
Work in process | 118.9 | 118.9 | 92.2 | |
Finished goods | 81.8 | 81.8 | 59 | |
Inventories | 366.9 | 366.9 | $ 250.1 | |
Property, Plant and Equipment | ||||
Amortization of inventory fair value adjustment in connection with acquisition | 14.2 | $ 0 | ||
NeoPhotonics | ||||
Property, Plant and Equipment | ||||
Inventory balance from NeoPhotonics merger | 17.8 | |||
Amortization of inventory fair value adjustment in connection with acquisition | $ 9.6 | 14.2 | ||
Amortization of remaining value | $ 3.6 |
Balance Sheet Details - Operati
Balance Sheet Details - Operating Lease Right-of-Use Assets (Details) - USD ($) $ in Millions | Aug. 03, 2022 | Dec. 31, 2022 | Jul. 02, 2022 |
Assets and Liabilities, Lessee | |||
Operating lease right-of-use assets | $ 119.1 | $ 102.1 | |
Less: accumulated amortization | (34.2) | (28.5) | |
Operating lease right-of-use assets, net | $ 84.9 | $ 73.6 | |
NeoPhotonics | |||
Property, Plant and Equipment | |||
Operating lease right-of-use assets, net | $ 16.9 | ||
NeoPhotonics | Minimum | |||
Property, Plant and Equipment | |||
Leases remaining term | 3 years 9 months 18 days | ||
NeoPhotonics | Maximum | |||
Property, Plant and Equipment | |||
Leases remaining term | 6 years 4 months 24 days |
Balance Sheet Details - Propert
Balance Sheet Details - Property, Plant and Equipment, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | Aug. 03, 2022 | Jul. 02, 2022 | |
Property, Plant and Equipment | ||||||
Property, plant and equipment, gross | $ 1,010.5 | $ 1,010.5 | $ 826.7 | |||
Less: Accumulated depreciation | (522.8) | (522.8) | (466.2) | |||
Property, plant and equipment, net | 487.7 | 487.7 | 360.5 | |||
Depreciation expense | 26.4 | $ 20.6 | 50.9 | $ 41 | ||
NeoPhotonics | ||||||
Property, Plant and Equipment | ||||||
Property, plant and equipment acquired | $ 106.1 | |||||
Land | ||||||
Property, Plant and Equipment | ||||||
Property, plant and equipment, gross | 63.3 | 63.3 | 49.7 | |||
Buildings and improvements | ||||||
Property, Plant and Equipment | ||||||
Property, plant and equipment, gross | 146.6 | 146.6 | 105.3 | |||
Machinery and equipment | ||||||
Property, Plant and Equipment | ||||||
Property, plant and equipment, gross | 632.6 | 632.6 | 548.8 | |||
Computer equipment and software | ||||||
Property, Plant and Equipment | ||||||
Property, plant and equipment, gross | 36.1 | 36.1 | 31.3 | |||
Furniture and fixtures | ||||||
Property, Plant and Equipment | ||||||
Property, plant and equipment, gross | 10.1 | 10.1 | 8.9 | |||
Leasehold improvements | ||||||
Property, Plant and Equipment | ||||||
Property, plant and equipment, gross | 45.9 | 45.9 | 35.7 | |||
Construction in progress | ||||||
Property, Plant and Equipment | ||||||
Property, plant and equipment, gross | $ 75.9 | $ 75.9 | $ 47 |
Balance Sheet Details - Other C
Balance Sheet Details - Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Oct. 01, 2022 | Jul. 02, 2022 | Jan. 01, 2022 | Oct. 02, 2021 | Jul. 03, 2021 |
Other Liabilities, Current | ||||||
Restructuring accrual and related charges | $ 14.1 | $ 3.1 | $ 0 | $ 0.3 | $ 0.8 | $ 5.7 |
Warranty accrual | 8.4 | 10 | ||||
Income tax payable | 20.5 | 26 | ||||
Other current liabilities | 8.2 | 3.4 | ||||
Other current liabilities | $ 51.2 | $ 39.4 |
Balance Sheet Details - Other N
Balance Sheet Details - Other Non-Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Jul. 02, 2022 |
Other Liabilities, Noncurrent | ||
Asset retirement obligations | $ 8.1 | $ 4.6 |
Pension and related accruals | 9 | 7.7 |
Unrecognized tax benefit | 52.1 | 30.5 |
Other non-current liabilities | 7.9 | 0.1 |
Other non-current liabilities | 77.1 | 42.9 |
Japan | ||
Other Liabilities, Noncurrent | ||
Pension and related accruals | 4.7 | 2.6 |
Switzerland | ||
Other Liabilities, Noncurrent | ||
Pension and related accruals | 0.4 | 1.7 |
Thailand | ||
Other Liabilities, Noncurrent | ||
Pension and related accruals | $ 3.9 | $ 3.4 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Narrative (Details) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2022 USD ($) | Oct. 01, 2022 business | Jul. 02, 2022 USD ($) | Dec. 31, 2022 USD ($) | Aug. 03, 2022 USD ($) | |
Goodwill | |||||
Number of businesses acquired (business) | business | 2 | ||||
Goodwill impairment | $ 0 | $ 0 | $ 0 | ||
NeoPhotonics | |||||
Goodwill | |||||
Goodwill, acquired during period | 318,400,000 | ||||
Other intangible assets, net | $ 412,500,000 | ||||
NeoPhotonics | OpComms | |||||
Goodwill | |||||
Goodwill, acquired during period | 318,300,000 | 318,400,000 | |||
Goodwill measurement of adjustment | 100,000 | ||||
NeoPhotonics | Lasers | |||||
Goodwill | |||||
Goodwill, acquired during period | 0 | ||||
IPG product lines | |||||
Goodwill | |||||
Goodwill, acquired during period | 10,900,000 | ||||
Other intangible assets, net | $ 40,000,000 | ||||
IPG product lines | OpComms | |||||
Goodwill | |||||
Goodwill, acquired during period | 6,500,000 | 10,900,000 | |||
Goodwill measurement of adjustment | $ 4,400,000 | ||||
IPG product lines | Lasers | |||||
Goodwill | |||||
Goodwill, acquired during period | $ 0 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Changes in Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Dec. 31, 2022 | Dec. 31, 2022 | |
Changes in goodwill | ||
Balance as of July 2, 2022 | $ 368.9 | |
Balance as of December 31, 2022 | $ 698.2 | 698.2 |
Optical Communications | ||
Changes in goodwill | ||
Balance as of July 2, 2022 | 363.5 | |
Balance as of December 31, 2022 | 692.8 | 692.8 |
Commercial Lasers | ||
Changes in goodwill | ||
Balance as of July 2, 2022 | 5.4 | |
Balance as of December 31, 2022 | 5.4 | 5.4 |
NeoPhotonics | ||
Changes in goodwill | ||
Goodwill, acquired during period | 318.4 | |
NeoPhotonics | Optical Communications | ||
Changes in goodwill | ||
Goodwill, acquired during period | 318.3 | 318.4 |
NeoPhotonics | Commercial Lasers | ||
Changes in goodwill | ||
Goodwill, acquired during period | 0 | |
IPG product lines | ||
Changes in goodwill | ||
Goodwill, acquired during period | 10.9 | |
IPG product lines | Optical Communications | ||
Changes in goodwill | ||
Goodwill, acquired during period | $ 6.5 | 10.9 |
IPG product lines | Commercial Lasers | ||
Changes in goodwill | ||
Goodwill, acquired during period | $ 0 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Acquired Intangible Assets (Details) - USD ($) $ in Millions | 6 Months Ended | |
Aug. 15, 2022 | Dec. 31, 2022 | |
Acquired Finite-Lived Intangible Assets | ||
Intangible assets acquired | $ 452.5 | |
NeoPhotonics | ||
Acquired Finite-Lived Intangible Assets | ||
Intangible assets acquired | 412.5 | |
IPG product lines | ||
Acquired Finite-Lived Intangible Assets | ||
Intangible assets acquired | 40 | |
Acquired developed technologies | ||
Acquired Finite-Lived Intangible Assets | ||
Acquired finite lived intangible assets | $ 228.6 | |
Weighted average amortization period (in years) | 5 years 2 months 12 days | |
Acquired developed technologies | NeoPhotonics | ||
Acquired Finite-Lived Intangible Assets | ||
Acquired finite lived intangible assets | $ 220 | |
Acquired developed technologies | IPG product lines | ||
Acquired Finite-Lived Intangible Assets | ||
Acquired finite lived intangible assets | $ 8.6 | 8.6 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets | ||
Acquired finite lived intangible assets | $ 146.8 | |
Weighted average amortization period (in years) | 5 years 10 months 24 days | |
Customer relationships | NeoPhotonics | ||
Acquired Finite-Lived Intangible Assets | ||
Acquired finite lived intangible assets | $ 144.5 | |
Customer relationships | IPG product lines | ||
Acquired Finite-Lived Intangible Assets | ||
Acquired finite lived intangible assets | 2.3 | 2.3 |
In-process research and development | ||
Acquired Finite-Lived Intangible Assets | ||
Acquire indefinite lived intangible assets | 77.1 | |
In-process research and development | NeoPhotonics | ||
Acquired Finite-Lived Intangible Assets | ||
Acquire indefinite lived intangible assets | 48 | |
In-process research and development | IPG product lines | ||
Acquired Finite-Lived Intangible Assets | ||
Acquired finite lived intangible assets | $ 29.1 | |
Acquire indefinite lived intangible assets | $ 29.1 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Acquired Developed Technology and Other Intangibles (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Dec. 31, 2022 | Jul. 02, 2022 | |
Finite-Lived Intangible Assets | ||
Gross Carrying Amounts | $ 987.8 | $ 535.3 |
Accumulated Amortization | (447.9) | (379.6) |
Net Carrying Amounts | 539.9 | 155.7 |
Acquired developed technologies | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amounts | 618.9 | 390.3 |
Accumulated Amortization | (352.3) | (303.6) |
Net Carrying Amounts | $ 266.6 | $ 86.7 |
Weighted average remaining amortization period (years) | 4 years 3 months 18 days | 2 years 6 months |
Customer relationships | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amounts | $ 291.8 | $ 145 |
Accumulated Amortization | (95.6) | (76) |
Net Carrying Amounts | $ 196.2 | $ 69 |
Weighted average remaining amortization period (years) | 5 years 1 month 6 days | 4 years 4 months 24 days |
In-process research and development | ||
Finite-Lived Intangible Assets | ||
Accumulated Amortization | $ 0 | |
Indefinite-lived intangible asset | $ 77.1 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Details of Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Finite-Lived Intangible Assets | ||||
Total amortization of intangibles | $ 36.1 | $ 21.5 | $ 68.3 | $ 42.9 |
Cost of sales | ||||
Finite-Lived Intangible Assets | ||||
Total amortization of intangibles | 24.8 | 15.9 | 47.7 | 31.7 |
Selling, general and administrative | ||||
Finite-Lived Intangible Assets | ||||
Total amortization of intangibles | $ 11.3 | $ 5.6 | $ 20.6 | $ 11.2 |
Goodwill and Other Intangible_8
Goodwill and Other Intangible Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Jul. 02, 2022 |
Fiscal Years | ||
Net Carrying Amounts | $ 539.9 | $ 155.7 |
Intangibles excluding in-process research and development | ||
Fiscal Years | ||
Remainder of 2023 | 57.5 | |
2024 | 110.2 | |
2025 | 97.3 | |
2026 | 84.9 | |
2027 | 73 | |
Thereafter | 39.9 | |
Net Carrying Amounts | $ 462.8 |
Debt - Convertible Notes Narrat
Debt - Convertible Notes Narrative (Details) $ / shares in Units, ¥ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 70 Months Ended | |||||||||||
Mar. 31, 2022 USD ($) $ / shares | Mar. 31, 2022 USD ($) trading_day $ / shares Rate | Dec. 31, 2019 USD ($) trading_day d $ / shares Rate | Mar. 31, 2017 USD ($) trading_day d $ / shares Rate | Dec. 31, 2022 USD ($) trading_day $ / shares | Dec. 31, 2022 JPY (¥) trading_day | Oct. 01, 2022 USD ($) | Jan. 01, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2022 JPY (¥) | Jan. 01, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares | Oct. 01, 2022 JPY (¥) | Jul. 02, 2022 USD ($) | Nov. 03, 2021 USD ($) | |
Debt Instrument | |||||||||||||||
Repurchase of common stock | $ 35,800,000 | $ 126,600,000 | |||||||||||||
Remaining principal balance | $ 2,405,400,000 | 2,405,400,000 | $ 2,405,400,000 | ||||||||||||
Repayment of term loan | 5,900,000 | 0 | |||||||||||||
Convertible Debt | |||||||||||||||
Debt Instrument | |||||||||||||||
Adjustment for interest accretion | 8,900,000 | $ 17,100,000 | 17,300,000 | $ 34,000,000 | |||||||||||
2028 Notes | Convertible Debt | |||||||||||||||
Debt Instrument | |||||||||||||||
Debt, aggregate principal amount | $ 861,000,000 | $ 861,000,000 | $ 861,000,000 | $ 861,000,000 | $ 861,000,000 | $ 861,000,000 | |||||||||
Debt interest rate (as a percent) | 0.50% | 0.50% | |||||||||||||
Proceeds from convertible debt | $ 854,800,000 | ||||||||||||||
Payments of debt issuance costs | 6,200,000 | ||||||||||||||
Debt related professional fees | 700,000 | ||||||||||||||
Repurchase of common stock | $ 200,000,000 | ||||||||||||||
Debt instrument conversion ratio | Rate | 0.76319% | ||||||||||||||
Conversion price (in usd per share) | $ / shares | $ 131.03 | $ 131.03 | $ 131.03 | $ 131.03 | $ 131.03 | ||||||||||
Number of days to trigger conversion (in days) | 20 days | 20 days | 20 days | ||||||||||||
Conversion threshold consecutive trading days (in days) | trading_day | 30 | 30 | 30 | ||||||||||||
Conversion threshold percentage of stock price trigger (as a percent) | 130% | 130% | 130% | ||||||||||||
Conversion threshold percentage of conversion rate from measurement period (as a percent) | 98% | ||||||||||||||
Percentage of principal amount required to be paid upon contingent note repurchase (as a percent) | 100% | 100% | |||||||||||||
Debt instrument redemption threshold | $ 100,000,000 | $ 100,000,000 | |||||||||||||
Liability component | $ 629,800,000 | $ 629,800,000 | |||||||||||||
Effective interest rate percentage (as a percent) | 5.70% | 5.70% | |||||||||||||
Discount | $ 231,200,000 | $ 231,200,000 | $ 6,000,000 | $ 6,000,000 | $ 6,000,000 | 226,300,000 | |||||||||
Sale price of common stock (in usd per share) | $ / shares | $ 170.34 | $ 170.34 | |||||||||||||
Remaining principal balance | $ 884,700,000 | 884,700,000 | 884,700,000 | ||||||||||||
2026 Notes | |||||||||||||||
Debt Instrument | |||||||||||||||
Sale price of common stock (in usd per share) | $ / shares | $ 129.08 | ||||||||||||||
2026 Notes | Convertible Debt | |||||||||||||||
Debt Instrument | |||||||||||||||
Debt, aggregate principal amount | $ 1,050,000,000 | $ 1,050,000,000 | $ 1,050,000,000 | $ 1,050,000,000 | 1,050,000,000 | ||||||||||
Debt interest rate (as a percent) | 0.50% | 0.25% | |||||||||||||
Repurchase of common stock | $ 200,000,000 | ||||||||||||||
Debt instrument conversion ratio | Rate | 1.00711% | ||||||||||||||
Conversion price (in usd per share) | $ / shares | $ 99.29 | $ 99.29 | $ 99.29 | $ 99.29 | |||||||||||
Number of days to trigger conversion (in days) | 20 days | 20 days | |||||||||||||
Conversion threshold consecutive trading days (in days) | trading_day | 30 | 30 | 30 | ||||||||||||
Conversion threshold percentage of stock price trigger (as a percent) | 130% | 130% | 130% | ||||||||||||
Conversion threshold percentage of conversion rate from measurement period (as a percent) | 98% | ||||||||||||||
Percentage of principal amount required to be paid upon contingent note repurchase (as a percent) | 100% | ||||||||||||||
Liability component | $ 734,800,000 | ||||||||||||||
Effective interest rate percentage (as a percent) | 5.80% | ||||||||||||||
Discount | $ 315,200,000 | $ 4,700,000 | $ 4,700,000 | $ 4,700,000 | 218,600,000 | ||||||||||
Repayments of debt | $ 196,000,000 | ||||||||||||||
Sale price of common stock (in usd per share) | $ / shares | $ 129.08 | ||||||||||||||
Conversion threshold trading days | trading_day | 20 | ||||||||||||||
Threshold measurement period | d | 5 | ||||||||||||||
Remaining principal balance | $ 1,070,900,000 | 1,070,900,000 | 1,070,900,000 | ||||||||||||
2024 Notes | Convertible Debt | |||||||||||||||
Debt Instrument | |||||||||||||||
Debt, aggregate principal amount | $ 450,000,000 | $ 448,100,000 | $ 448,100,000 | $ 448,100,000 | 448,100,000 | ||||||||||
Debt interest rate (as a percent) | 0.25% | ||||||||||||||
Debt instrument conversion ratio | Rate | 1.64965% | ||||||||||||||
Conversion price (in usd per share) | $ / shares | $ 60.62 | $ 60.62 | $ 60.62 | $ 60.62 | |||||||||||
Number of days to trigger conversion (in days) | 20 days | 20 days | |||||||||||||
Conversion threshold consecutive trading days (in days) | trading_day | 30 | 30 | 30 | ||||||||||||
Conversion threshold percentage of stock price trigger (as a percent) | 130% | 130% | 130% | ||||||||||||
Conversion threshold percentage of conversion rate from measurement period (as a percent) | 98% | ||||||||||||||
Percentage of principal amount required to be paid upon contingent note repurchase (as a percent) | 100% | ||||||||||||||
Discount | $ 27,400,000 | $ 27,400,000 | $ 27,400,000 | $ 38,200,000 | |||||||||||
Principal amount of debt converted (less than) | 1,900,000 | ||||||||||||||
Sale price of common stock (in usd per share) | $ / shares | $ 78.80 | $ 78.80 | |||||||||||||
Threshold measurement period | d | 5 | ||||||||||||||
Remaining principal balance | $ 449,800,000 | 449,800,000 | $ 449,800,000 | ||||||||||||
2024 Notes | Convertible Debt | Plan | |||||||||||||||
Debt Instrument | |||||||||||||||
Principal amount of debt converted (less than) | $ 100,000 | $ 100,000 | |||||||||||||
2015 Mitsubishi Term Loan | Secured debt | |||||||||||||||
Debt Instrument | |||||||||||||||
Remaining principal balance | ¥ | ¥ 5 | ||||||||||||||
Fair value of debt acquired | $ 5,900,000 | ||||||||||||||
Repayment of term loan | $ 900,000 | ||||||||||||||
Adjustment for interest accretion | ¥ | ¥ 0.1 | ¥ 0.1 |
Debt - Components of Convertibl
Debt - Components of Convertible Notes (Details) | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2022 USD ($) trading_day $ / shares | Dec. 31, 2019 USD ($) trading_day $ / shares | Mar. 31, 2017 USD ($) trading_day $ / shares | Dec. 31, 2022 USD ($) trading_day $ / shares | Jul. 02, 2022 USD ($) | |
2026 Notes | |||||
Liability component: | |||||
Sale price of common stock (in usd per share) | $ / shares | $ 129.08 | ||||
Convertible Debt | 2024 Notes | |||||
Liability component: | |||||
Principal | $ 450,000,000 | $ 448,100,000 | $ 448,100,000 | ||
Unamortized debt discount and issuance costs | (27,400,000) | (38,200,000) | |||
Net carrying amount of the liability component | $ 420,700,000 | 409,900,000 | |||
Sale price of common stock (in usd per share) | $ / shares | $ 78.80 | $ 78.80 | |||
Conversion threshold percentage of stock price trigger (as a percent) | 130% | 130% | |||
Conversion price (in usd per share) | $ / shares | $ 60.62 | $ 60.62 | |||
Number of days to trigger conversion (in days) | 20 days | ||||
Conversion threshold consecutive trading days (in days) | trading_day | 30 | 30 | |||
Convertible Debt | 2026 Notes | |||||
Liability component: | |||||
Principal | $ 1,050,000,000 | $ 1,050,000,000 | 1,050,000,000 | ||
Unamortized debt discount and issuance costs | $ (315,200,000) | (4,700,000) | (218,600,000) | ||
Net carrying amount of the liability component | $ 1,045,300,000 | 831,400,000 | |||
Sale price of common stock (in usd per share) | $ / shares | $ 129.08 | ||||
Conversion threshold percentage of stock price trigger (as a percent) | 130% | 130% | |||
Conversion price (in usd per share) | $ / shares | $ 99.29 | $ 99.29 | |||
Number of days to trigger conversion (in days) | 20 days | ||||
Conversion threshold consecutive trading days (in days) | trading_day | 30 | 30 | |||
Convertible Debt | 2028 Notes | |||||
Liability component: | |||||
Principal | $ 861,000,000 | $ 861,000,000 | 861,000,000 | ||
Unamortized debt discount and issuance costs | $ (231,200,000) | (6,000,000) | (226,300,000) | ||
Net carrying amount of the liability component | $ 855,000,000 | $ 634,700,000 | |||
Sale price of common stock (in usd per share) | $ / shares | $ 170.34 | $ 170.34 | |||
Conversion threshold percentage of stock price trigger (as a percent) | 130% | 130% | |||
Conversion price (in usd per share) | $ / shares | $ 131.03 | $ 131.03 | |||
Number of days to trigger conversion (in days) | 20 days | 20 days | |||
Conversion threshold consecutive trading days (in days) | trading_day | 30 | 30 |
Debt - Interest Expense Related
Debt - Interest Expense Related to Convertible Notes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Debt Instrument | ||||
Amortization of the debt discount and debt issuance costs | $ 11.9 | $ 30.8 | ||
Convertible Debt | ||||
Debt Instrument | ||||
Contractual interest expense | $ 2.7 | $ 1.6 | 5.4 | 3.2 |
Amortization of the debt discount and debt issuance costs | 6.2 | 15.5 | 11.9 | 30.8 |
Total interest expense | $ 8.9 | $ 17.1 | $ 17.3 | $ 34 |
Debt - Future Interest and Prin
Debt - Future Interest and Principal Payments (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Debt Instrument | |
Remainder of 2023 | $ 5.4 |
2024 | 458.8 |
2025 | 9.6 |
2026 | 9.6 |
2027 and thereafter | 1,922 |
Total convertible notes payments | 2,405.4 |
Convertible Debt | 2024 Notes | |
Debt Instrument | |
Remainder of 2023 | 0.6 |
2024 | 449.2 |
2025 | 0 |
2026 | 0 |
2027 and thereafter | 0 |
Total convertible notes payments | 449.8 |
Convertible Debt | 2026 Notes | |
Debt Instrument | |
Remainder of 2023 | 2.6 |
2024 | 5.3 |
2025 | 5.3 |
2026 | 5.3 |
2027 and thereafter | 1,052.4 |
Total convertible notes payments | 1,070.9 |
Convertible Debt | 2028 Notes | |
Debt Instrument | |
Remainder of 2023 | 2.2 |
2024 | 4.3 |
2025 | 4.3 |
2026 | 4.3 |
2027 and thereafter | 869.6 |
Total convertible notes payments | $ 884.7 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2022 | Oct. 01, 2022 | Jan. 01, 2022 | Oct. 02, 2021 | Dec. 31, 2022 | Jan. 01, 2022 | |
Changes in accumulated other comprehensive income (loss) by component | ||||||
Balance at the beginning of the period | $ 1,526.4 | $ 1,875 | $ 1,971.4 | $ 1,972.8 | $ 1,875 | $ 1,972.8 |
Other comprehensive income (loss) | 3.6 | (0.6) | (2.3) | 0.3 | 3 | (2) |
Balance at the end of the period | 1,543.6 | 1,526.4 | 2,021.9 | 1,971.4 | 1,543.6 | 2,021.9 |
Total | ||||||
Changes in accumulated other comprehensive income (loss) by component | ||||||
Balance at the beginning of the period | (0.2) | 0.4 | 8.5 | 8.2 | 0.4 | 8.2 |
Other comprehensive income (loss) | 3.6 | (0.6) | (2.3) | 0.3 | ||
Balance at the end of the period | 3.4 | (0.2) | 6.2 | 8.5 | 3.4 | 6.2 |
Foreign currency translation adjustments, net of tax | ||||||
Changes in accumulated other comprehensive income (loss) by component | ||||||
Balance at the beginning of the period | 9.7 | 9.7 | 9.7 | 9.7 | 9.7 | 9.7 |
Other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||
Balance at the end of the period | 9.7 | 9.7 | 9.7 | 9.7 | 9.7 | 9.7 |
Defined benefit obligations, net of tax | ||||||
Changes in accumulated other comprehensive income (loss) by component | ||||||
Balance at the beginning of the period | 1 | 1 | (1.4) | (1.4) | 1 | (1.4) |
Other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||
Balance at the end of the period | 1 | 1 | (1.4) | (1.4) | 1 | (1.4) |
Unrealized gain (loss) on available-for-sale securities, net of tax | ||||||
Changes in accumulated other comprehensive income (loss) by component | ||||||
Balance at the beginning of the period | (10.9) | (10.3) | 0.2 | (0.1) | (10.3) | (0.1) |
Other comprehensive income (loss) | 3.6 | (0.6) | (2.3) | 0.3 | ||
Balance at the end of the period | $ (7.3) | $ (10.9) | $ (2.1) | $ 0.2 | $ (7.3) | $ (2.1) |
Restructuring and Related Cha_3
Restructuring and Related Charges - Summary of Activity of Restructuring and Related Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Summary of Restructuring Activity and Related Charges | ||||
Balance as of beginning of period | $ 3.1 | $ 0.8 | $ 0 | $ 5.7 |
Charges (reversals), net | 13.9 | 0.1 | 23.2 | (1) |
Payments | (2.9) | (0.6) | (9.1) | (4.4) |
Balance as of end of period | $ 14.1 | $ 0.3 | $ 14.1 | $ 0.3 |
Restructuring and Related Cha_4
Restructuring and Related Charges - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Restructuring and Related Charges | ||||
Charges (reversals), net | $ 13.9 | $ 0.1 | $ 23.2 | $ (1) |
Scenario, Adjustment | ||||
Restructuring and Related Charges | ||||
Charges (reversals), net | $ (1) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 4.6 | $ 12.4 | $ 23.8 | $ 30.5 |
Discrete tax expense related to international restructuring | 4 | |||
Unrecognized tax benefit that would impact tax rate if recognized | 52.1 | 52.1 | ||
Unrecognized tax benefit that could affect tax rate to decrease over next 12 months | $ 12 | $ 12 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Nov. 06, 2022 | Jul. 03, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | Jul. 02, 2022 | Aug. 03, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Authorized (in shares) | 900,000 | |||||||
Shares of common stock available for grant (in shares) | 2,800,000 | 2,800,000 | 3,800,000 | |||||
Stock-based compensation expense | $ 36.6 | $ 27.3 | $ 83.2 | $ 52.1 | ||||
Severance costs | 1.5 | |||||||
Stock-based compensation capitalized to inventory | $ 14.1 | $ 6.4 | ||||||
NeoPhotonics | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Stock-based compensation expense | $ 11.9 | |||||||
Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Stock units granted (in shares) | 1,600,000 | |||||||
Nonvested, weighted average grant date fair value (in usd per share) | $ 87.8 | $ 87.8 | $ 85.9 | |||||
Stock-based compensation cost related to awards granted to employees | $ 224.7 | $ 224.7 | ||||||
Estimated amortization period (in years) | 2 years 1 month 6 days | |||||||
PSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Stock units granted (in shares) | 600,000 | |||||||
Nonvested, weighted average grant date fair value (in usd per share) | $ 89.3 | $ 89.3 | $ 81.9 | |||||
Stock-based compensation expense | $ 6.2 | $ 15 | ||||||
2015 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Authorized (in shares) | 900,000 | |||||||
Common stock authorized for issuance under plan (in shares) | 3,800,000 | 3,800,000 | ||||||
2015 Plan | Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Vesting period (in years) | 3 years | |||||||
2015 Plan | PSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Vesting period (in years) | 3 years | |||||||
Stock units granted (in shares) | 300,000 | |||||||
Fair value | $ 40.2 | $ 26 | ||||||
2015 Plan | PSUs | Executive Officers And Senior Management | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Fair value | $ 22.6 | |||||||
2015 Plan | PSUs | Employee | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Fair value | $ 3.5 | |||||||
2015 Plan | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Vesting period (in years) | 1 year | |||||||
2015 Plan | Minimum | Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Vesting period (in years) | 1 year | |||||||
2015 Plan | Minimum | PSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Vesting period (in years) | 1 year | |||||||
2015 Plan | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Vesting period (in years) | 4 years | |||||||
2015 Plan | Maximum | Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Vesting period (in years) | 4 years | |||||||
Replacement Award | Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Stock units granted (in shares) | 400,000 | |||||||
Nonvested, weighted average grant date fair value (in usd per share) | $ 93.4 | |||||||
Replacement Award | PSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Stock units granted (in shares) | 0 | |||||||
Nonvested, weighted average grant date fair value (in usd per share) | $ 0 | |||||||
Fiscal 2015 Equity Incentive Plan | PSUs | Director | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Stock units granted (in shares) | 200,000 | |||||||
2015 Purchase Plan | Employee stock | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||||
Common stock authorized for issuance under plan (in shares) | 3,000,000 | 3,000,000 | ||||||
Shares of common stock available for grant (in shares) | 1,300,000 | 1,300,000 | ||||||
Discount rate provided under purchase plan (as a percent) | 15% | |||||||
Look-back period (in months) | 6 months | |||||||
Stock-based compensation expense | $ 0.8 | $ 0.9 | $ 2 | $ 2.1 |
Equity - Stock-Based Compensati
Equity - Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||||
Stock-based compensation expense | $ 36.6 | $ 27.3 | $ 83.2 | $ 52.1 |
Income tax benefit associated with stock-based compensation | 6.4 | 4.2 | 11.5 | 8.2 |
Cost of sales | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||||
Stock-based compensation expense | 6.7 | 5.2 | 12.2 | 9.8 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||||
Stock-based compensation expense | 10.6 | 5.4 | 20.2 | 10.4 |
Selling, general and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||||
Stock-based compensation expense | $ 19.3 | $ 16.7 | $ 50.8 | $ 31.9 |
Equity - Stock Award Activity (
Equity - Stock Award Activity (Details) shares in Millions | 6 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Restricted Stock Units | |
Number of Shares | |
Balance at beginning of period (in shares) | 2 |
Granted (in shares) | 1.6 |
Vested (in shares) | (0.7) |
Canceled (in shares) | (0.2) |
Balance at end of period (in shares) | 3.1 |
Weighted-Average Grant Date Fair Value per Share | |
Balance at beginning of period (in usd per share) | $ / shares | $ 85.9 |
Granted (in usd per share) | $ / shares | 86.9 |
Vested (in usd per share) | $ / shares | 83.9 |
Canceled (in usd per share) | $ / shares | 88.1 |
Balance at end of period (in usd per share) | $ / shares | $ 87.8 |
Restricted Stock Units | Replacement Award | |
Number of Shares | |
Granted (in shares) | 0.4 |
Performance Stock Units | |
Number of Shares | |
Balance at beginning of period (in shares) | 0.3 |
Granted (in shares) | 0.6 |
Vested (in shares) | (0.1) |
Canceled (in shares) | (0.1) |
Balance at end of period (in shares) | 0.7 |
Weighted-Average Grant Date Fair Value per Share | |
Balance at beginning of period (in usd per share) | $ / shares | $ 81.9 |
Granted (in usd per share) | $ / shares | 88.2 |
Vested (in usd per share) | $ / shares | 70.5 |
Canceled (in usd per share) | $ / shares | 88.6 |
Balance at end of period (in usd per share) | $ / shares | $ 89.3 |
Performance Stock Units | Replacement Award | |
Number of Shares | |
Granted (in shares) | 0 |
Equity - Awards Available for G
Equity - Awards Available for Grant (Details) shares in Millions | 6 Months Ended |
Dec. 31, 2022 shares | |
Awards Available for Grant | |
Balance as of beginning of period (in shares) | 3.8 |
Assumed in connection with NeoPhotonics merger (in shares) | 0.4 |
Authorized (in shares) | 0.9 |
Granted (in shares) | (2.2) |
Canceled (in shares) | 0.3 |
Balance as of end of period (in shares) | 2.8 |
Replacement Award | |
Awards Available for Grant | |
Shares issued (in shares) | (0.4) |
Equity - Employee Stock Purchas
Equity - Employee Stock Purchase Plan Activity Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation expense | $ 36.6 | $ 27.3 | $ 83.2 | $ 52.1 |
2015 Purchase Plan | Employee stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Stock-based compensation expense | $ 0.8 | $ 0.9 | $ 2 | $ 2.1 |
Shares issued to employees (in shares) | 100,000 | 100,000 |
Equity - Repurchase and Retirem
Equity - Repurchase and Retirement of Common Stock Narrative (Details) - USD ($) | 6 Months Ended | 11 Months Ended | |||
Dec. 31, 2022 | Jan. 01, 2022 | Apr. 02, 2022 | Mar. 03, 2022 | May 07, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Repurchases of common stock (in shares) | 300,000 | 7,400,000 | |||
Average cost per share (in dollars per share) | $ 89.80 | $ 83.38 | |||
Repurchase of common stock | $ 35,800,000 | $ 126,600,000 | |||
Shares authorized for repurchase (up to) | $ 1,000,000,000 | $ 700,000,000 | |||
Repurchases of common stock, excluding accrued repurchases | $ 25,700,000 | ||||
Retained Earnings (Accumulated Deficit) | |||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||
Repurchase of common stock | $ 615,500,000 |
Commitments and Contingencies -
Commitments and Contingencies - Purchase Obligations (Details) $ in Millions | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Legally-binding purchase commitment obligations | $ 391.5 |
Typical duration of supply agreements with single or limited source vendors (in years) | 1 year |
Commitments and Contingencies_2
Commitments and Contingencies - Product Warranties Narrative (Details) | 6 Months Ended |
Dec. 31, 2022 | |
Loss Contingencies | |
Product warranty term (in months) | 12 months |
Minimum | |
Loss Contingencies | |
Product warranty term (in months) | 6 months |
Maximum | |
Loss Contingencies | |
Product warranty term (in months) | 5 years |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Changes in Warranty Reserve (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Changes in warranty reserve | ||||
Balance as of beginning of period | $ 10.1 | $ 5.1 | $ 10 | $ 5 |
Warranties assumed in NeoPhotonics merger | 0 | 0 | 0.7 | 0 |
Provision for warranty | 2.8 | 3.8 | 4.3 | 5.5 |
Utilization of reserve | (4.5) | (0.3) | (6.6) | (1.9) |
Balance as of end of period | $ 8.4 | $ 8.6 | $ 8.4 | $ 8.6 |
Commitments and Contingencies_4
Commitments and Contingencies - Litigation (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2021 lawsuit | Dec. 31, 2018 lawsuit | Dec. 31, 2022 USD ($) | |
Business Acquisition | |||
Accrual for legal expenses | $ | $ 7.8 | ||
Oclaro | |||
Business Acquisition | |||
Number of lawsuits filed | 7 | ||
Number of pending claims | 1 | ||
NeoPhotonics | |||
Business Acquisition | |||
Number of lawsuits filed | 10 |
Operating Segments and Geogra_3
Operating Segments and Geographic Information - Narrative (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 customer | Jan. 01, 2022 customer | Dec. 31, 2022 customer segment region | Jan. 01, 2022 customer | Jul. 02, 2022 | |
Concentration Risk | |||||
Number of operating segments | segment | 2 | ||||
Number of geographic regions | region | 3 | ||||
Inventory Purchases | Customer concentration risk | One Vendors | |||||
Concentration Risk | |||||
Concentration risk (as a percent) | 43% | 52% | |||
Inventory Purchases | Customer concentration risk | Two Vendors | |||||
Concentration Risk | |||||
Concentration risk (as a percent) | 58% | 61% | |||
Customer A | Revenue | Customer concentration risk | |||||
Concentration Risk | |||||
Concentration risk (as a percent) | 31% | 41% | |||
Customer A | Accounts Receivable | Customer concentration risk | |||||
Concentration Risk | |||||
Concentration risk (as a percent) | 14% | 10% | |||
Customer B | Revenue | Customer concentration risk | |||||
Concentration Risk | |||||
Concentration risk (as a percent) | 33% | 46% | |||
Customer B | Accounts Receivable | Customer concentration risk | |||||
Concentration Risk | |||||
Concentration risk (as a percent) | 10% | ||||
One Customers | Accounts Receivable | Customer concentration risk | |||||
Concentration Risk | |||||
Number Of Customers | 1 | ||||
Two Customers | Revenue | Customer concentration risk | |||||
Concentration Risk | |||||
Number Of Customers | 2 | 2 | 2 | 2 |
Operating Segments and Geogra_4
Operating Segments and Geographic Information - Schedule of Information on Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Information on reportable segments | ||||
Net revenue | $ 506 | $ 446.7 | $ 1,012.8 | $ 895.1 |
Gross profit | 166.2 | 207.5 | 367.4 | 439.7 |
Stock-based compensation | (36.6) | (27.3) | (83.2) | (52.1) |
Amortization of acquired intangibles | (36.1) | (21.5) | (68.3) | (42.9) |
Gain recognized on disposition of land and building | (7.2) | 5 | ||
Disposed of by Sale | Manufacturing Site | Equipment | ||||
Information on reportable segments | ||||
Gain recognized on disposition of land and building | 5.9 | 5.9 | ||
Operating segments | ||||
Information on reportable segments | ||||
Net revenue | 506 | 446.7 | 1,012.8 | 895.1 |
Gross profit | 227 | 228 | 471.1 | 474.7 |
Operating segments | OpComms | ||||
Information on reportable segments | ||||
Net revenue | 448.8 | 397.4 | 902.2 | 803.4 |
Gross profit | 197 | 201.8 | 413 | 427.7 |
Operating segments | Lasers | ||||
Information on reportable segments | ||||
Net revenue | 57.2 | 49.3 | 110.6 | 91.7 |
Gross profit | 30 | 26.2 | 58.1 | 47 |
Unallocated corporate items: | ||||
Information on reportable segments | ||||
Stock-based compensation | (6.7) | (5.2) | (12.2) | (9.8) |
Amortization of acquired intangibles | (24.8) | (15.9) | (47.7) | (31.7) |
Amortization of acquired inventory fair value adjustments | (9.6) | 0 | (14.2) | 0 |
Inventory and fixed asset write down due to product line exits | 0 | (0.1) | 0 | (0.1) |
Integration related costs | (2.8) | 0 | (2.8) | 0 |
Other (charges) gains, net | (16.9) | $ 0.7 | (26.8) | $ 6.6 |
Supply chain constraints | $ 11.7 | $ 19 |
Operating Segments and Geogra_5
Operating Segments and Geographic Information - Schedule of Revenue by Geographic Region (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Net revenue and identifiable assets by geographic regions | ||||
Amount | $ 506 | $ 446.7 | $ 1,012.8 | $ 895.1 |
Americas: | Geographic Concentration Risk | Total Net Revenue | ||||
Net revenue and identifiable assets by geographic regions | ||||
Amount | $ 128.8 | $ 92 | $ 250.8 | $ 155.1 |
Concentration risk (as a percent) | 25.50% | 20.60% | 24.80% | 17.30% |
United States | Geographic Concentration Risk | Total Net Revenue | ||||
Net revenue and identifiable assets by geographic regions | ||||
Amount | $ 65.5 | $ 51 | $ 127.7 | $ 79.1 |
Concentration risk (as a percent) | 12.90% | 11.40% | 12.60% | 8.80% |
Mexico | Geographic Concentration Risk | Total Net Revenue | ||||
Net revenue and identifiable assets by geographic regions | ||||
Amount | $ 59.5 | $ 38.3 | $ 117 | $ 71.3 |
Concentration risk (as a percent) | 11.80% | 8.60% | 11.60% | 8% |
Other Americas | Geographic Concentration Risk | Total Net Revenue | ||||
Net revenue and identifiable assets by geographic regions | ||||
Amount | $ 3.8 | $ 2.7 | $ 6.1 | $ 4.7 |
Concentration risk (as a percent) | 0.80% | 0.60% | 0.60% | 0.50% |
Asia-Pacific: | Geographic Concentration Risk | Total Net Revenue | ||||
Net revenue and identifiable assets by geographic regions | ||||
Amount | $ 331.3 | $ 325.5 | $ 667.8 | $ 685 |
Concentration risk (as a percent) | 65.40% | 73% | 65.90% | 76.40% |
Hong Kong | Geographic Concentration Risk | Total Net Revenue | ||||
Net revenue and identifiable assets by geographic regions | ||||
Amount | $ 65.9 | $ 115 | $ 143.5 | $ 257.3 |
Concentration risk (as a percent) | 13% | 25.80% | 14.20% | 28.80% |
South Korea | Geographic Concentration Risk | Total Net Revenue | ||||
Net revenue and identifiable assets by geographic regions | ||||
Amount | $ 52 | $ 77.9 | $ 119.7 | $ 183 |
Concentration risk (as a percent) | 10.30% | 17.40% | 11.80% | 20.40% |
Japan | Geographic Concentration Risk | Total Net Revenue | ||||
Net revenue and identifiable assets by geographic regions | ||||
Amount | $ 50.8 | $ 46.7 | $ 95.6 | $ 92.8 |
Concentration risk (as a percent) | 10% | 10.50% | 9.40% | 10.40% |
Thailand | Geographic Concentration Risk | Total Net Revenue | ||||
Net revenue and identifiable assets by geographic regions | ||||
Amount | $ 77.9 | $ 26.2 | $ 135.4 | $ 43.3 |
Concentration risk (as a percent) | 15.40% | 5.90% | 13.40% | 4.80% |
Other Asia-Pacific | Geographic Concentration Risk | Total Net Revenue | ||||
Net revenue and identifiable assets by geographic regions | ||||
Amount | $ 84.7 | $ 59.7 | $ 173.6 | $ 108.6 |
Concentration risk (as a percent) | 16.70% | 13.40% | 17.10% | 12.10% |
EMEA | Geographic Concentration Risk | Total Net Revenue | ||||
Net revenue and identifiable assets by geographic regions | ||||
Amount | $ 45.9 | $ 29.2 | $ 94.2 | $ 55 |
Concentration risk (as a percent) | 9.10% | 6.50% | 9.30% | 6.10% |
Operating Segments and Geogra_6
Operating Segments and Geographic Information - Schedule of Long-lived Assets by Geographic Region (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Jul. 02, 2022 |
Property, plant and equipment, net | ||
Total property, plant and equipment, net | $ 487.7 | $ 360.5 |
United States | ||
Property, plant and equipment, net | ||
Total property, plant and equipment, net | 131.2 | 107.8 |
Thailand | ||
Property, plant and equipment, net | ||
Total property, plant and equipment, net | 131.7 | 107.6 |
Japan | ||
Property, plant and equipment, net | ||
Total property, plant and equipment, net | 94.2 | 38.9 |
China | ||
Property, plant and equipment, net | ||
Total property, plant and equipment, net | 52.2 | 32.7 |
Other countries | ||
Property, plant and equipment, net | ||
Total property, plant and equipment, net | $ 78.4 | $ 73.5 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) | 6 Months Ended |
Dec. 31, 2022 segment | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Number of reportable segments | 2 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Percentage of Total Net Revenue Attributable to Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2022 | Jan. 01, 2022 | |
Concentration Risk | ||||
Net Revenue | $ 506 | $ 446.7 | $ 1,012.8 | $ 895.1 |
Product offerings | OpComms | ||||
Concentration Risk | ||||
Net Revenue | $ 448.8 | $ 397.4 | $ 902.2 | $ 803.4 |
Product offerings | OpComms | Revenue | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 88.70% | 89% | 89.10% | 89.80% |
Product offerings | Lasers | ||||
Concentration Risk | ||||
Net Revenue | $ 49.3 | $ 91.7 | ||
Product offerings | Lasers | Revenue | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 11.30% | 11% | 10.90% | 10.20% |
Telecom and Datacom | Product offerings | OpComms | ||||
Concentration Risk | ||||
Net Revenue | $ 384.2 | $ 267.1 | $ 744.3 | $ 483.1 |
Telecom and Datacom | Product offerings | OpComms | Revenue | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 75.90% | 59.80% | 73.50% | 54% |
Industrial and Consumer | Product offerings | OpComms | ||||
Concentration Risk | ||||
Net Revenue | $ 64.6 | $ 130.3 | $ 157.9 | $ 320.3 |
Industrial and Consumer | Product offerings | OpComms | Revenue | ||||
Concentration Risk | ||||
Concentration risk (as a percent) | 12.80% | 29.20% | 15.60% | 35.80% |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Contract Balances (Details) $ in Millions | 6 Months Ended |
Dec. 31, 2022 USD ($) | |
Accounts receivable, net | |
Accounts receivable, net, beginning balance | $ 262 |
Accounts receivable, net, change | 68.5 |
Accounts receivable, net, ending balance | $ 330.5 |
Accounts receivable, net, percentage change (as a percent) | 26.10% |
Deferred revenue and customer deposits | |
Deferred revenue and customer deposits, beginning balance | $ 0 |
Deferred revenue and customer deposits, change | 1.3 |
Deferred revenue and customer deposits, ending balance | $ 1.3 |