COVER
COVER - shares shares in Millions | 3 Months Ended | |
Sep. 30, 2023 | Nov. 01, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
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 $0.001 per share | |
Trading Symbol | LITE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 67 | |
Entity Central Index Key | 0001633978 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-29 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Income Statement [Abstract] | ||
Net revenue | $ 317.6 | $ 506.8 |
Cost of sales | 222.9 | 282.6 |
Amortization of acquired developed intangibles | 18 | 23 |
Gross profit | 76.7 | 201.2 |
Operating expenses: | ||
Research and development | 73.5 | 72.7 |
Selling, general and administrative | 73 | 105.7 |
Restructuring and related charges | 11 | 9.3 |
Total operating expenses | 157.5 | 187.7 |
Income (loss) from operations | (80.8) | 13.5 |
Interest expense | (9.7) | (8.5) |
Other income, net | 21.2 | 13.8 |
Income (loss) before income taxes | (69.3) | 18.8 |
Income tax provision (benefit) | (1.4) | 19.2 |
Net loss | $ (67.9) | $ (0.4) |
Net loss per share: | ||
Basic (in usd per share) | $ (1.02) | $ (0.01) |
Diluted (in usd per share) | $ (1.02) | $ (0.01) |
Shares used to compute net loss per share: | ||
Basic (in shares) | 66.7 | 68.1 |
Diluted (in shares) | 66.7 | 68.1 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (67.9) | $ (0.4) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | (0.2) | 0 |
Net change in unrealized gain (loss) on available-for-sale securities | 1.3 | (0.6) |
Other comprehensive income (loss), net of tax | 1.1 | (0.6) |
Comprehensive loss, net of tax | $ (66.8) | $ (1) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 861.6 | $ 859 |
Short-term investments | 1,082.7 | 1,154.6 |
Accounts receivable, net | 220 | 246.1 |
Inventories | 428 | 408.6 |
Prepayments and other current assets | 99.4 | 109.6 |
Total current assets | 2,691.7 | 2,777.9 |
Property, plant and equipment, net | 511.6 | 489.5 |
Operating lease right-of-use assets, net | 68.8 | 77.3 |
Goodwill | 695.1 | 695.1 |
Other intangible assets, net | 435.2 | 459.2 |
Deferred tax asset | 128 | 116.3 |
Other non-current assets | 14.6 | 16.8 |
Total assets | 4,545 | 4,632.1 |
Current liabilities: | ||
Accounts payable | 134.6 | 169.4 |
Accrued payroll and related expenses | 40.9 | 39.4 |
Accrued expenses | 59.4 | 51.2 |
Convertible notes, current | 315.7 | 311.6 |
Operating lease liabilities, current | 11.8 | 14.4 |
Other current liabilities | 31.3 | 47.8 |
Total current liabilities | 593.7 | 633.8 |
Convertible notes, non-current | 2,500.9 | 2,500 |
Operating lease liabilities, non-current | 41.2 | 47.7 |
Deferred tax liability | 12.7 | 3.4 |
Other non-current liabilities | 85.7 | 91.4 |
Total liabilities | 3,234.2 | 3,276.3 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value, 990 authorized shares, 67.0 and 66.4 shares issued and outstanding as of September 30, 2023 and July 1, 2023, respectively | 0.1 | 0.1 |
Additional paid-in capital | 1,714 | 1,692.2 |
Accumulated deficit | (408.5) | (340.6) |
Accumulated other comprehensive income | 5.2 | 4.1 |
Total stockholders’ equity | 1,310.8 | 1,355.8 |
Total liabilities and stockholders’ equity | $ 4,545 | $ 4,632.1 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Jul. 01, 2023 |
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) | 67,000,000 | 66,400,000 |
Common stock, shares outstanding (in shares) | 67,000,000 | 66,400,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ 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 | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) |
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 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net 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) | 0.7 | |||||||
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) | (0.2) | |||||||
Repurchases of common stock | (25.7) | (25.7) | ||||||
Repurchases of common stock (in shares) | (0.3) | |||||||
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 | 68.2 | |||||||
Balance at the beginning of the period at Jul. 01, 2023 | $ 1,355.8 | $ 0.1 | 1,692.2 | (340.6) | 4.1 | |||
Balance at the beginning of period (in shares) at Jul. 01, 2023 | 66.4 | 66.4 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net loss | $ (67.9) | (67.9) | ||||||
Other comprehensive income (loss) | 1.1 | 1.1 | ||||||
Issuance of shares in connection with vesting of restricted stock units and performance stock units (in shares) | 0.8 | |||||||
Withholding taxes related to net share settlement of restricted stock units | (12.9) | (12.9) | ||||||
Withholding taxes related to net share settlement of restricted stock units (in shares) | (0.2) | |||||||
Stock-based compensation | 34.7 | 34.7 | ||||||
Balance at the end of the period at Sep. 30, 2023 | $ 1,310.8 | $ 0.1 | $ 1,714 | $ (408.5) | $ 5.2 | |||
Balance at the end of period (in shares) at Sep. 30, 2023 | 67 | 67 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (67.9) | $ (0.4) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation expense | 28.2 | 24.5 |
Stock-based compensation | 32.1 | 46.6 |
Amortization of acquired intangibles | 29 | 32.2 |
Loss on sales and dispositions of property, plant and equipment | 1.4 | 0.3 |
Amortization of debt discount and debt issuance costs | 4.9 | 5.7 |
Amortization of inventory fair value adjustment in connection with acquisition | 0 | 4.6 |
Other non-cash items | (5.7) | (2.2) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 26.1 | (11.5) |
Inventories | (16.8) | (24.6) |
Operating lease right-of-use assets, net | 3.7 | 3.6 |
Prepayments and other current and non-currents assets | 7.3 | (1.9) |
Income taxes, net | (19.9) | (11) |
Accounts payable | (28) | (41.1) |
Accrued payroll and related expenses | 1.5 | (14.5) |
Operating lease liabilities | (4) | (6.9) |
Accrued expenses and other current and non-current liabilities | 5.8 | 17.4 |
Net cash provided by (used in) operating activities | (2.3) | 20.8 |
INVESTING ACTIVITIES: | ||
Payments for acquisition of property, plant and equipment | (57.8) | (22.9) |
Acquisition of businesses, net of cash acquired | 0 | (860.8) |
Purchases of short-term investments | (149.1) | (79.5) |
Proceeds from maturities and sales of short-term investments | 227.7 | 316.6 |
Payments for acquisition of intangible assets | (3) | 0 |
Net cash provided by (used in) investing activities | 17.8 | (646.6) |
FINANCING ACTIVITIES: | ||
Repurchase of common stock | 0 | (35.8) |
Payment of withholding taxes related to net share settlement of restricted stock units | (12.9) | (22.4) |
Repayment of term loan | 0 | (0.9) |
Net cash used in financing activities | (12.9) | (59.1) |
Increase (decrease) in cash and cash equivalents | 2.6 | (684.9) |
Cash and cash equivalents at beginning of period | 859 | 1,290.2 |
Cash and cash equivalents at end of period | 861.6 | 605.3 |
Supplemental disclosure of cash flow information: | ||
Cash paid for taxes, net | 18.5 | 29.3 |
Cash paid for interest | 0.6 | 0.6 |
Supplemental disclosure of non-cash transactions: | ||
Settlement of loan to NeoPhotonics | 0 | 50 |
Right-of-use assets obtained in exchange for new operating lease liabilities | 0 | 19.4 |
Unpaid portion of acquisition purchase price | 0 | 0.8 |
Property, Plant and Equipment | ||
Supplemental disclosure of non-cash transactions: | ||
Unpaid property, plant and equipment/intangible assets in accounts payable and accrued expenses | 4.2 | 12.6 |
Finite-Lived Intangible Assets | ||
Supplemental disclosure of non-cash transactions: | ||
Unpaid property, plant and equipment/intangible assets in accounts payable and accrued expenses | $ 2 | $ 0 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 3 Months Ended |
Sep. 30, 2023 | |
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 for manufacturing, inspection, and life-science applications. Our Cloud and Networking 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. Our products also address enterprise, cloud, and data center applications, including storage-access networks (“SANs”), local-area networks (“LANs”) and wide-area networks (“WANs”), as well as artificial intelligence and machine learning (“AI/ML”). Our Industrial Tech products include diode laser products such as 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, among others. In the industrial end-market, our diode lasers are used primarily as pump sources for pulsed and kilowatt class fiber lasers. Our products also include laser products 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. Basis of Presentation We have prepared the accompanying condensed consolidated financial statements 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. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. 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. Prior to fiscal year 2024, we operated in two reportable segments consisting of Optical Communications (“OpComms”) and Commercial Lasers (“Lasers”). During the fiscal first quarter of 2024, we changed our organizational structure to better align with trends in our markets and our customer and product mix. Our new operating segments are Cloud & Networking and Industrial Tech. The Cloud & Networking segment includes the Telecom and Datacom product lines that were previously part of the OpComms segment. The Industrial Tech segment includes the previous Lasers segment and the Industrial & Consumer product lines that were previously part of the OpComms segment. Comparative prior period segment information has been recast to conform to the new segment structure and measures. The changes in our operating segments had no impact on our previously reported consolidated results of operations, financial condition, or cash flows. Refer to “Note 15. Operating Segments and Geographic Information” . Our business and operating results depend significantly on general market and economic conditions. The current global macroeconomic environment is volatile and continues to be adversely impacted by inflation, a dynamic supply chain and demand environment, and signs of a weaker macroeconomic environment impacting capital expenditures across our served markets. Additionally, instability in the global credit markets, 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 global economic challenges continue to put pressure on our business and operating results. We are continuously monitoring both the current developments in the ongoing war between Russia and Ukraine including the related additional export controls and resulting sanctions imposed on Russia and Belarus by the U.S. and other countries, and the recent war between Israel and Hamas. Additional factors, such as increased inflation, escalating energy costs, constrained raw material availability and the related cost increases, could continue to impact the global economy and our business. Although the global implications of the wars are difficult to predict at this time, we do not presently foresee direct material adverse effects on our business. Business Combinations On August 3, 2022, we completed a merger with NeoPhotonics Corporation (“NeoPhotonics”). On August 15, 2022, we completed a transaction to acquire IPG Photonics’ telecom transmission product lines. We have applied the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations to account for both of the transactions . Refer to “Note 4. Business Combinations”. Fiscal Years We utilize a 52-53 week fiscal year ending on the Saturday closest to June 30 th . 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 2024 is a 52-week year ending on June 29, 2024, with the quarter ended September 30, 2023 being a 13-week quarterly period. Our fiscal 2023 was a 52-week year that ended on July 1, 2023, with the quarter ended October 1, 2022 being a 13-week quarterly period. Principles of Consolidation The 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. Accounting Policies |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 3 Months Ended |
Sep. 30, 2023 | |
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 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 months ended September 30, 2023 and October 1, 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 (as defined below) 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 months ended September 30, 2023 and October 1, 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, 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 | 3 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 3. Earnings Per Share The following table sets forth the computation of basic and diluted net loss per share ( in millions, except per share data ): Three Months Ended September 30, 2023 October 1, 2022 Numerator: Net loss - basic and diluted $ (67.9) $ (0.4) Denominator: Weighted average common shares outstanding - basic and diluted 66.7 68.1 Net loss per share: Basic $ (1.02) $ (0.01) Diluted $ (1.02) $ (0.01) Shares from stock-based benefit plans and shares issuable assuming conversion of our convertible notes are anti-dilutive for the three months ended September 30, 2023 and October 1, 2022, respectively, and are therefore excluded from the calculation of diluted net loss per share as the Company had a net loss for both periods . Anti-dilutive shares excluded from the calculation of diluted net loss per share for the three months ended September 30, 2023 include 31.2 million shares related to the convertible note s, 4.6 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”). Anti-dilutive shares excluded from the calculation of diluted net loss per share for the three months ended October 1, 2022 include 24.5 million shares related to the convertible notes, 4.1 million shares issuable under RSUs and PSUs, and 0.1 million shares issuable under the 2015 Purchase Plan. Refer to “Note 13. Equity”. |
Business Combinations
Business Combinations | 3 Months Ended |
Sep. 30, 2023 | |
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 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 table summarizes our final allocation of the purchase price consideration to the assets acquired and liabilities assumed as of the Closing date ( in millions ): Fair Value Total purchase price consideration $ 934.4 Assets acquired Cash and cash equivalents $ 92.9 Accounts receivable, net 66.8 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 5.4 Other non-current assets 1.9 Total assets 811.0 Liabilities assumed Accounts payable 79.6 Accrued payroll and related expenses 11.1 Accrued expenses 3.8 Other current liabilities 10.6 Operating lease liabilities, current 2.8 Operating lease liabilities, non-current 13.2 Deferred tax liability 38.3 Other non-current liabilities 32.5 Total liabilities 191.9 Goodwill $ 315.3 (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”. Goodwill of $315.3 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. At the date of acquisition, the entire goodwill related to the acquisition was assigned to the OpComms segment. As a result of the change of our reportable segments in the fiscal first quarter of 2024, it has been reassigned to the Cloud & Networking segment. Refer to “Note 15. Operating Segments and Geographic Information”. NeoPhotonics contributed $72.8 million of our consolidated net revenue for the three months ended October 1, 2022. Due to our corporate structure and the allocation of selling, general and administrative costs, it was impracticable to determine NeoPhotonics’ contribution to our earnings for the three months ended October 1, 2022. As of September 30, 2023, the operation of NeoPhotonics has been fully integrated to the combined business. The total transaction consideration of $934.4 million was funded by the cash balances of the combined company. We also recorded $28.7 million of merger-related costs, representing professional and other direct acquisition costs. Of the $28.7 million of merger-related costs, $8.3 million was incurred in fiscal year 2022 and $20.4 million was incurred in fiscal year 2023, which was recorded as selling, general and administrative expense in the condensed consolidated statements of op erations. Supplemental Pro Forma Information Pro forma net revenue and net income was $530.7 million and $32.4 million, respectively, for the three months ended October 1, 2022, as if the merger was completed at the beginning of fiscal 2022. 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 pro forma financial information 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, nor does it reflect synergies that might have been achieved, nor is it indicative of future operating results or financial position. 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 (“IPG 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. This acquisition enables us to expand our business in the Cloud & Networking segment (previously to the OpComms segment prior to the change of our reportable segments in the fiscal first quarter of 2024). Refer to “Note 15. Operating Segments and Geographic Information”. 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 of $55.9 million was paid in cash. We have completed the purchase price allocation. Our final 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 goodwill of $10.9 million, which was assigned to the Cloud & Networking segment. We recorded $2.0 million of merger-related costs, representing professional and other direct acquisition costs. Of the $2.0 million of merger-related costs, $0.4 million was incurred in fiscal year 2022 and $1.6 million was incurred in fiscal year 2023, which was recorded as selling, general and administrative expense in the consolidated statements of op erations. The pro forma financial information from the acquisition of the IPG telecom transmission product lines, assuming the acquisition had occurred as of the first day of fiscal 2022, as well as revenue and earnings generated during fiscal 2023, were not material for disclosure purposes. |
Cash, Cash Equivalents and Shor
Cash, Cash Equivalents and Short-term Investments | 3 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023: Cash $ 156.3 $ — $ — $ 156.3 Cash equivalents: Commercial paper 4.8 — — 4.8 Money market funds 285.3 — — 285.3 U.S. Treasury securities 415.1 0.1 — 415.2 Total cash and cash equivalents $ 861.5 $ 0.1 $ — $ 861.6 Short-term investments: Certificates of deposit $ 29.6 $ — $ — $ 29.6 Commercial paper 119.2 — (0.1) 119.1 Corporate debt securities 459.4 — (3.2) 456.2 Municipal bonds 4.6 — — 4.6 U.S. Agency securities 194.7 — (1.4) 193.3 U.S. Treasury securities 281.4 — (1.5) 279.9 Total short-term investments $ 1,088.9 $ — $ (6.2) $ 1,082.7 July 1, 2023: Cash $ 254.3 $ — $ — $ 254.3 Cash equivalents: Money market funds 276.1 — — 276.1 U.S. Agency securities 4.0 — — 4.0 U.S. Treasury securities 324.6 — — 324.6 Total cash and cash equivalents $ 859.0 $ — $ — $ 859.0 Short-term investments: Certificates of deposit $ 16.5 $ — $ — $ 16.5 Commercial paper 132.9 — (0.2) 132.7 Corporate debt securities 472.7 — (3.9) 468.8 U.S. Agency securities 207.9 — (1.7) 206.2 U.S. Treasury securities 332.4 — (2.0) 330.4 Total short-term investments $ 1,162.4 $ — $ (7.8) $ 1,154.6 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 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 months ended September 30, 2023 and October 1, 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 months ended September 30, 2023 and October 1, 2022, our other income, net was $21.2 million and $13.8 million, respectively, which includes interest and investment income on cash equivalents and short-term investments of $21.7 million and $4.8 million, respectively. As of September 30, 2023 and July 1, 2023, we recorded interest receivables of $8.0 million and $6.7 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 September 30, 2023: U.S. Agency securities $ 159.5 $ (1.2) $ 33.8 $ (0.2) $ (1.4) Certificates of deposit 11.7 — — — — Commercial paper 89.9 (0.1) — — (0.1) Corporate debt securities 351.3 (2.7) 68.7 (0.5) (3.2) Foreign government bonds 4.6 — — — — U.S. government bonds 215.4 (1.3) 22.9 (0.2) (1.5) Total $ 832.4 $ (5.3) $ 125.4 $ (0.9) $ (6.2) July 1, 2023: U.S. Agency securities $ 39.6 $ (0.4) $ 170.6 $ (1.3) $ (1.7) Certificates of deposit — — $ 7.7 — — Commercial paper — — $ 128.5 (0.2) (0.2) Corporate debt securities 93.6 (1.2) $ 358.9 (2.7) (3.9) U.S. government bonds 50.8 (0.6) $ 221.4 (1.4) (2.0) Total $ 184.0 $ (2.2) $ 887.1 $ (5.6) $ (7.8) The following table classifies our short-term investments by remaining maturities ( in millions ): September 30, 2023 July 1, 2023 Amortized Cost Fair Value Amortized Cost Fair Value Due in 1 year $ 735.8 $ 733.3 $ 762.9 $ 759.1 Due in 1 year through 5 years 353.1 349.4 399.5 395.5 $ 1,088.9 $ 1,082.7 $ 1,162.4 $ 1,154.6 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023: (1) Assets: Cash equivalents: Commercial paper $ — $ 4.8 $ — $ 4.8 Money market funds 285.3 — — 285.3 U.S. Treasury securities 415.2 — — 415.2 Short-term investments: Certificates of deposit — 29.6 — 29.6 Commercial paper — 119.1 — 119.1 Corporate debt securities — 456.2 — 456.2 Municipal bonds — 4.6 — 4.6 U.S. Agency securities — 193.3 — 193.3 U.S. Treasury securities 279.9 — — 279.9 Total assets $ 980.4 $ 807.6 $ — $ 1,788.0 (1) Excludes $156.3 million in cash held in our bank accounts as of September 30, 2023. Level 1 Level 2 Level 3 Total July 1, 2023: (1) Assets: Cash equivalents: Money market funds $ 276.1 $ — $ — $ 276.1 U.S. Agency securities — 4.0 — 4.0 U.S. Treasury securities 324.6 — — 324.6 Short-term investments: Certificates of deposit — 16.5 — 16.5 Commercial paper — 132.7 — 132.7 Corporate debt securities — 468.8 — 468.8 U.S. Agency securities — 206.2 — 206.2 U.S. Treasury securities 330.4 — — 330.4 Total assets $ 931.1 $ 828.2 $ — $ 1,759.3 (1) Excludes $254.3 million in cash held in our bank accounts as of July 1, 2023. Financial Instruments Not Recorded at Fair Value on a Recurring Basis We report our financial instruments at fair value with the exception of our convertible notes, refer to “Note 9. Debt”. 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 convertible notes to be a Level 2 measurement as they are not actively traded in markets. The carrying amounts and estimated fair values of the convertible notes are as follows for the periods presented ( in millions ): September 30, 2023 July 1, 2023 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value 2029 Notes $ 598.8 $ 553.2 $ 598.6 $ 625.2 2028 Notes 855.9 630.8 855.5 677.8 2026 Notes 1,046.2 885.1 1,045.9 933.2 2024 Notes 315.7 319.1 311.6 345.2 $ 2,816.6 $ 2,388.2 $ 2,811.6 $ 2,581.4 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 2023, 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 months ended September 30, 2023. |
Balance Sheet Details
Balance Sheet Details | 3 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 and July 1, 2023, the allowance for credit losses on our trade receivables was $0.3 million and less than $0.1 million, respectively . Inventories The components of inventories were as follows ( in millions ): September 30, 2023 July 1, 2023 Raw materials and purchased parts $ 173.3 $ 170.5 Work in process 113.4 103.2 Finished goods 141.3 134.9 Inventories $ 428.0 $ 408.6 Property, Plant and Equipment, Net The components of property, plant and equipment, net were as follows ( in millions ): September 30, 2023 July 1, 2023 Land $ 75.2 $ 63.5 Buildings and improvements 188.1 170.3 Machinery and equipment 665.8 657.9 Computer equipment and software 42.6 41.4 Furniture and fixtures 11.0 10.2 Leasehold improvements 41.8 49.6 Construction in progress 79.8 69.2 1,104.3 1,062.1 Less: Accumulated depreciation (592.7) (572.6) Property, plant and equipment, net $ 511.6 $ 489.5 Our construction in progress primarily includes machinery and equipment that we expect to place in service in the next 12 months. In August 2023, we purchased land and buildings that we previously leased in Caswell, United Kingdom for a total purchase price of $23.3 million. Additionally, we capitalized $1.8 million of incremental direct costs for fees paid to third parties. We also recorded a $0.3 million reduction in the carrying value of buildings purchased related to the termination of leases for the purchased buildings. The total carrying value of assets purchased is $24.8 million at the purchase date, of which $11.8 million was allocated to the land and $13.0 million to the buildings. During the three months ended September 30, 2023 and October 1, 2022, we recorded depreciation expense of $28.2 million and $24.5 million, respectively. Operating Lease Right-of-Use Assets Operating lease right-of-use assets, net were as follows ( in millions ): September 30, 2023 July 1, 2023 Operating lease right-of-use assets $ 104.1 $ 116.5 Less: accumulated amortization (35.3) (39.2) Operating lease right-of-use assets, net $ 68.8 $ 77.3 In connection with the purchase of land and buildings in Caswell, UK in August 2023, we terminated our leases for the purchased buildings and recorded a $0.3 million of reduction in the carrying value of buildings purchased, as a result of derecognizing $4.8 million of net operating lease right-of-use asset, $2.4 million of operating lease liabilities, current, and $2.7 million of operating lease liabilities, non-current. Other Current Liabilities The components of other current liabilities were as follows (in millions) : September 30, 2023 July 1, 2023 Restructuring accrual and related charges (1) $ 9.3 $ 5.0 Warranty accrual (2) 5.5 6.8 Deferred revenue and customer deposits 1.6 2.1 Income tax payable (3) 10.7 28.0 Other current liabilities 4.2 5.9 Other current liabilities $ 31.3 $ 47.8 (1) Refer to “Note 11. Restructuring and Related Charges.” (2) Refer to “Note 14. Commitments and Contingencies.” (3) Refer to “Note 12. Income Taxes.” Other Non-Current Liabilities The components of other non-current liabilities were as follows ( in millions ): September 30, 2023 July 1, 2023 Asset retirement obligations $ 7.5 $ 8.2 Pension and related accruals (1) 10.1 9.6 Unrecognized tax benefit 59.5 64.4 Other non-current liabilities 8.6 9.2 Other non-current liabilities $ 85.7 $ 91.4 (1) We have defined benefit pension plans in Japan, Switzerland, and Thailand. Pension and related accrual of $10.1 million as of September 30, 2023 relates to $10.2 million of non-current portion of benefit obligation, offset by $0.1 million of funding for the pension plan in Switzerland. Pension and related accrual of $9.6 million as of July 1, 2023 relates to $10.2 million of non-current portion of benefit obligation, offset by $0.6 million of funding for the pension plan in Switzerland. We typically re-evaluate the assumptions related to the fair value of our defined benefit obligations annually in the fiscal fourth quarter and make any updates as necessary. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 8. Goodwill and Other Intangible Assets Goodwill In August 2022, we completed two acquisitions, our merger with NeoPhotonics and the acquisition of IPG telecom transmission product lines. We recognized goodwill of $315.3 million related to the NeoPhotonics merger and $10.9 million related to the acquisition of the IPG telecom transmission product lines as of September 30, 2023 and July 1, 2023. At the date of these acquisitions, the entire goodwill related to these acquisitions was assigned to the OpComms segment. As a result of the change of our reportable segments in the fiscal first quarter of 2024, it has been reassigned to the Cloud & Networking segment. Refer to “Note 15. Operating Segments and Geographic Information”. The following table presents our goodwill by reportable segments as of September 30, 2023 and July 1, 2023 ( in millions) : Cloud & Networking Industrial Tech Total Balances as of September 30, 2023 and July 1, 2023 $ 683.9 $ 11.2 $ 695.1 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 2023, we completed the annual impairment test of goodwill, which indicated there was no goodwill impairment. There were no indicators of goodwill impairment during the three months ended September 30, 2023. Other Intangibles The intangible assets are amortized on a straight-line basis over the estimated useful lives, except for certain 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 acquired customer relationships are amortized to selling, general and administrative expenses in the consolidated statement of operations. In-process research and development (“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. During the annual impairment testing performed in the fourth quarter of fiscal 2023, we concluded that our intangible and other long-lived assets were not impaired at the asset group level. 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 at the asset group level during the three months ended September 30, 2023. In connection with the merger with NeoPhotonics and the acquisition of the IPG telecom transmission product lines, we recorded $452.5 million of intangible assets. Refer to “Note 4. Business Combinations”. The intangible assets acquired from the acquisitions were as follows as of the acquisition date ( in millions, except for weighted average amortization period ): Fair Value At The Acquisition Date Weighted Average Amortization Period NeoPhotonics IPG Telecom Transmission 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 all of our intangibles as of the periods presented ( in millions, except for weighted average remaining amortization period ): September 30, 2023 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Weighted Average Remaining Amortization Period (Years) Acquired developed technologies $ 636.4 $ (404.4) $ 232.0 4.0 Customer relationships 289.7 (126.9) 162.8 3.5 In-process research and development 40.4 — 40.4 n/a Total intangible assets $ 966.5 $ (531.3) $ 435.2 July 1, 2023 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Weighted Average Remaining Amortization Period (Years) Acquired developed technologies $ 630.9 $ (385.5) $ 245.4 4.2 Customer relationships 289.7 (116.8) 172.9 3.7 In-process research and development 40.9 — 40.9 n/a Total intangible assets $ 961.5 $ (502.3) $ 459.2 The following table presents details of amortization for the periods presented (in millions ): Three Months Ended September 30, 2023 October 1, 2022 Cost of sales $ 18.0 $ 22.9 Research and development 0.3 — Selling, general and administrative 10.7 9.3 Total amortization of intangibles $ 29.0 $ 32.2 Based on the carrying amount of our acquired developed technologies and customer relationships as of September 30, 2023, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows (in millions) : Fiscal Years Remainder of 2024 $ 83.4 2025 98.6 2026 89.0 2027 76.2 2028 38.1 Thereafter 9.5 Total future amortization $ 394.8 |
Debt
Debt | 3 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Note 9. Debt Convertible Notes 2029 Notes On June 16, 2023, we issued $603.7 million in aggregate principal amount of 1.50% convertible notes due in 2029 (“2029 Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2029 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 “2029 Indenture”). The 2029 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 2029 Notes was $599.4 million, after deducting $4.3 million of net issuance costs. In addition, we incurred $0.8 million of professional fees directly related to this transaction. Concurrent with the issuance of the 2029 Notes, we used $132.8 million of the net proceeds to repurchase $125.0 million aggregate principal amount of the 2024 Notes and $125.0 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 the repayment of our indebtedness, including any of our existing convertible notes, capital expenditures, working capital and potential acquisitions. The 2029 Notes bear interest at a rate of 1.50% per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2023. The 2029 Notes will mature on December 15, 2029, unless earlier redeemed, repurchased by us, or converted pursuant to their terms. The initial conversion rate is 14.3808 shares of common stock per $1,000 principal amount of the 2029 Notes (which is equivalent to an initial conversion price of approximately $69.54 per share). The conversion rate is subject to adjustment upon the occurrence of certain events specified in the 2029 Indenture but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change 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 2029 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, 2029, holders of the 2029 Notes may convert their 2029 Notes only under the following circumstances: • during any fiscal quarter commencing after September 30, 2023 (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 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% if the applicable conversion price on each applicable trading day; • during the five five • if we call any or all of the 2029 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 2029 Indenture. On or after September 15, 2029 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2029 Notes at any time. Upon conversion, we will 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 2029 Notes, at our option (subject to the partial redemption limitation set forth in the 2029 Indenture), on or after June 22, 2026, if the last reported sale price of our 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 notice of redemption at a redemption price equal to 100% of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2029 Notes. If we elect to redeem fewer than all of the outstanding 2029 Notes, at least $100.0 million aggregate principal amount of the 2029 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 2029 Indenture), holders may require us to repurchase all or a portion of their 2029 Notes for cash at a price equal to 100% of the principal amount of the 2029 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The entire 2029 Notes are recorded as convertible notes, non-current in our consolidated balance sheets as of September 30, 2023 and July 1, 2023 , measured at amortized cost. 2028 Notes In March 2022, we issued $861.0 million in aggregate principal amount of 0.50% convertible senior 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 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. 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 five • 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. The entire 2028 Notes are recorded as convertible notes, non-current in our consolidated balance sheets as of September 30, 2023 and July 1, 2023 , measured at amortized cost. 2026 Notes In December 2019, we issued $1,050.0 million in aggregate principal amount of 0.50% convertible senior 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 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 five • 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. The entire 2026 Notes are recorded as convertible notes, non-current in our consolidated balance sheets as of September 30, 2023 and July 1, 2023 , measured at amortized cost. 2024 Notes In March 2017, we issued $450.0 million in aggregate principal amount of 0.25% convertible senior 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 five • 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. 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. As of the issuance date, March 8, 2017, the derivative liability fair value of $129.9 million was calculated using the binomial valuation approach. The residual principal amount of the 2024 Notes of $320.1 million before issuance costs was allocated to the debt component. We incurred approximately $7.7 million in transaction costs in connection with the issuance of the 2024 Notes. These costs were allocated to the debt component and recognized as a debt discount. We amortize the debt discount, including both the initial value of the derivative liability and the transaction costs, over the term of the 2024 Notes using the effective interest method. The effective interest rate of the 2024 Notes is 5.4% per year. 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 value of the conversion option at the time of issuance is treated as an original issue discount for purposes of accounting for the debt component of the 2024 Notes. The debt component will accrete up to the original amount over the expected term of the debt. 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. Concurrent with the issuance of the 2029 Notes in June 2023, we used $132.8 million of the net proceeds to repurchase $125.0 million aggregate principal amount of the 2024 Notes, which we accounted for as an extinguishment of liability. $13.5 million of the $132.8 million repurchase price was allocated to the conversion feature of the repurchased 2024 Notes, representing the fair value of the conversion feature at the date of the repurchase, and was recognized as a reduction of the stockholders’ equity. Additionally, s ince issuing the 2024 Notes, we have converted a total of approximately $1.9 million principal amount of the 2024 Notes. The remaining principal amount was $323.1 million as of September 30, 2023 and July 1, 2023, recorded as convertible notes, current in our consolidated balance sheets, as the 2024 Notes will mature on March 15, 2024. Convertible Notes - Additional Disclosures Our convertible notes consisted of the following components as of the periods presented ( in millions ): September 30, 2023 2024 Notes (1) 2026 Notes (2) 2028 Notes (3) 2029 Notes (4) Total Principal $ 323.1 $ 1,050.0 $ 861.0 $ 603.7 $ 2,837.8 Unamortized debt discount and debt issuance costs (7.4) (3.8) (5.1) (4.9) (21.2) Net carrying amount of the liability component $ 315.7 $ 1,046.2 $ 855.9 $ 598.8 $ 2,816.6 July 1, 2023 2024 Notes (1) 2026 Notes (2) 2028 Notes (3) 2029 Notes (4) Total Principal $ 323.1 $ 1,050.0 $ 861.0 $ 603.7 $ 2,837.8 Unamortized debt discount and debt issuance costs (11.5) (4.1) (5.5) (5.1) (26.2) Net carrying amount of the liability component $ 311.6 $ 1,045.9 $ 855.5 $ 598.6 $ 2,811.6 (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. The 2024 Notes are classified as current liabilities as the debt will mature on March 15, 2024. (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. (4 ) If the closing price of our stock exceeds $90.40 (or 130% of the conversion price of $69.54) for 20 of the last 30 trading days of any future quarter, the 2029 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 consolidated balance sheets. The following table sets forth interest expense information related to the convertible notes for the periods presented (in millions) : Three Months Ended September 30, 2023 October 1, 2022 Contractual interest expense $ 4.8 $ 2.7 Amortization of the debt discount and debt issuance costs 4.9 5.7 Total interest expense $ 9.7 $ 8.4 The future interest and principal payments related to our convertible notes are as follows as of September 30, 2023 (in millions) : Fiscal Years 2024 Notes 2026 Notes 2028 Notes 2029 Notes Total 2024 $ 323.7 $ 5.3 $ 4.3 $ 9.1 $ 342.4 2025 — 5.3 4.3 9.1 18.7 2026 — 5.3 4.3 9.1 18.7 2027 — 1,052.5 4.3 9.1 1,065.9 2028 — — 865.3 9.1 874.4 Thereafter — — — 617.1 617.1 Total payments $ 323.7 $ 1,068.4 $ 882.5 $ 662.6 $ 2,937.2 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 and the remaining balance of approximately $5.0 million was fully paid in the fiscal second quarter of 2023. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Note 10. Accumulated Other Comprehensive Income (Loss) Our accumulated other comprehensive income (loss), net of tax, 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), net of tax, 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 (3) Total Beginning balance as of July 1, 2023 $ 10.4 $ (0.4) $ (5.9) $ 4.1 Other comprehensive gain (loss), net (0.2) — 1.3 1.1 Ending balance as of September 30, 2023 $ 10.2 $ (0.4) $ (4.6) $ 5.2 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 (3) Total Beginning balance as of July 2, 2022 $ 9.7 $ 1.0 $ (10.3) $ 0.4 Other comprehensive loss, net — — (0.6) (0.6) Ending balance as of October 1, 2022 $ 9.7 $ 1.0 $ (10.9) $ (0.2) (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. In fiscal 2023, we acquired IPG telecom transmission product lines. The functional currency of the Brazilian entities acquired as part of this acquisition is the local currency. During the three months ended September 30, 2023, we recorded foreign currency translation adjustments of $0.2 million. (2) We re-evaluate the assumptions related to the fair value of our defined benefit obligations annually in the fiscal fourth quarter and make any updates as necessary. (3) For the three months ended September 30, 2023 and October 1, 2022, our unrealized loss on available-for-sale securities is presented net of tax of $0.4 million and $0.2 million , respectively. |
Restructuring and Related Charg
Restructuring and Related Charges | 3 Months Ended |
Sep. 30, 2023 | |
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 activities of restructuring and related charges for the periods as presented ( in millions ): Three Months Ended September 30, 2023 October 1, 2022 Balance as of beginning of period $ 5.0 $ — Charges 11.0 9.3 Payments (6.7) (6.2) Balance as of end of period $ 9.3 $ 3.1 During the three months ended September 30, 2023, we recorded restructuring and related charges of $11.0 million in our condensed consolidated statements of operations, which was primarily due to company-wide cost reduction initiatives, as well as our integration efforts as a result of the merger with NeoPhotonics. During the three months ended October 1, 2022, we recorded restructuring and related charges of $9.3 million in our condensed consolidated statements of operations, which was primarily attributable to severance and employee-related benefits associated with NeoPhotonics’ executive severance and retention agreements. These retention agreements provide, under certain circumstances, for payments and benefits upon an involuntary termination of employment. Any changes in the estimates of executing our restructuring activities will be reflected in our future results of operations. |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2023 | |
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 benefit of $1.4 million and a tax provision of $19.2 million for the three months ended September 30, 2023 and October 1, 2022, respectively. Our tax provision for the three months ended September 30, 2023 includes a discrete tax benefit of $1.8 million primarily related to the tax benefit from changes in prior year uncertain tax positions, partially offset by the tax expenses related to a shortfall in connection with stock-based compensation vested during the quarter and foreign return to provision differences. Our tax provision for the three months ended October 1, 2022 includes a discrete tax expense of $13.1 million, primarily related to the international restructuring and currency re-measurement of certain tax related accounts, partially offset by the tax benefits from tax rate changes. Our estimated effective tax rate for fiscal 2024 differs from the 21% U.S. statutory rate primarily due to the income tax expense from foreign rate differential, non-deductible stock-based compensation and foreign income inclusions in the U.S., partially offset by the income tax benefit from various income tax credits. As of September 30, 2023, we had $59.5 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 $1.9 million over the next 12 months. |
Equity
Equity | 3 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023, we had 4.6 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 within four years. The fair value of these grants is based on the closing market price of our common stock on the date of grant. As of September 30, 2023, 0.4 million shares of common stock under the 2015 Plan were available for grant. 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 within four years. For annual refresh grants, RSUs generally vest ratably on an annual basis, or combination of annual and quarterly basis, over three years. During the three months ended September 30, 2023, our board of directors approved grants of 1.7 million RSUs, which primarily vest over three years. 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 within three years. During the three months ended September 30, 2023, our board of directors approved a grant of 0.3 million PSUs with an aggregate grant date fair value of $16.0 million to executive and non-executive employees as part of our revised Annual Incentive Plan. These PSUs are subject to performance targets and service conditions, with a vesting period of one year. The board of directors also approved a grant of 0.4 million PSUs with an aggregate grant date fair value of $19.3 million to certain executive officers and senior management. These PSUs will vest subject to the achievement of revenue targets and certain non-financial performance measurements, as well as service conditions, over three years. 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, 1.1 million shares remained available for issuance as of September 30, 2023. 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 September 30, 2023 October 1, 2022 Cost of sales $ 6.0 $ 5.5 Research and development 10.3 9.6 Selling, general and administrative 15.8 31.5 Total stock-based compensation $ 32.1 $ 46.6 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 July 1, 2023. 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. For the three months ended September 30, 2023 and October 1, 2022 , $4.7 million and $8.8 million, respectively, of stock-based compensation costs are related to PSUs. 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. Total income tax benefit associated with stock-based compensation recognized in our condensed consolidated statements of operations during the periods presented was as follows (in millions) : Three Months Ended September 30, 2023 October 1, 2022 Income tax benefit associated with stock-based compensation $ 1.9 $ 5.1 Approximately $16.9 million and $14.2 million of stock-based compensation was capitalized to inventory as of September 30, 2023 and July 1, 2023, respectively. As of September 30, 2023, $219.3 million of stock-based compensation cost related to RSU awards remains to be amortized, which is expected to be recognized over an estimated amortization period o f 2.3 years. Stock Award Activity The following table summarizes our award activities for the three months ended September 30, 2023 (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 1, 2023 2.6 $ 85.0 0.6 $ 89.1 Granted 1.7 52.9 0.7 53.3 Vested (0.7) 88.9 (0.2) 89.5 Canceled (0.1) 81.2 — 90.1 Balance as of September 30, 2023 3.5 $ 68.0 1.1 $ 65.9 A summary of awards available for grant is as follows (in millions) : Awards Available for Grant Balance as of July 1, 2023 2.7 Granted (2.4) Canceled 0.1 Balance as of September 30, 2023 0.4 Employee Stock Purchase Plan Activity The 2015 Purchase Plan expense for the three months ended September 30, 2023 and October 1, 2022 was $1.2 million and $1.2 million , respectively. The expense related to the 2015 Purchase Plan is recorded on a straight-line basis over the relevant subscription period. During the three months ended September 30, 2023 and October 1, 2022, there were no shares issued to employees through the 2015 Purchase Plan. Repurchase and Retirement of Common Stock Share Buyback Program We have a share buyback program that authorizes us to utilize up to an aggregate amount of $1.2 billion to purchase our own shares of common stock through May 2025. During the three months ended September 30, 2023 , we did not repurchase any shares of our common stock. During the three months ended October 1, 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 initially approved the share buyback program, we have repurchased 7.7 million shares in aggregate at an average price of $81.66 per share for a total purchase price of $630.4 million. We recorded the $630.4 million aggregate purchase price as a reduction of retained earnings within our condensed consolidated balance sheet. All repurchased shares were retired immediately. As of September 30, 2023, we have $569.6 million remaining under the share buyback program. The price, timing, amount, and method of future repurchases will be determined based on the valuation of market conditions and other factors, at prices determined to be attractive and in the best interests of both the Company and our stockholders. The stock repurchase program may be suspended or terminated at any time. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14. Commitments and Contingencies Purchase Obligations Our purchase obligations of $395.0 million as of September 30, 2023 represent legally binding commitments to purchase inventory and other commitments made in the normal course of business to meet operational requirements. 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 these 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 September 30, 2023 October 1, 2022 Balance as of beginning of period $ 6.8 $ 10.0 Warranties assumed in NeoPhotonics merger — 0.7 Provision for warranty 0.2 1.5 Utilization of reserve (1.5) (2.1) Balance as of end of period $ 5.5 $ 10.1 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 and 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. During the year ended July 1, 2023, we recorded $7.8 million with respect to the pending settlement of certain non-ordinary course litigation matters under accrued expenses in our consolidated balance sheet, which has not been settled as of September 30, 2023. 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, the lead 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 lead 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 lead plaintiff to file a motion for preliminary approval of the settlement by March 17, 2023. The lead plaintiff filed his motion for preliminary approval of the settlement on March 16, 2023, and defendants filed a statement of non-opposition on March 30, 2023. On April 20, 2023, the court held a hearing on lead plaintiff’s motion for preliminary approval of the settlement. The court declined to grant lead plaintiff’s motion for preliminary approval and ordered lead plaintiff to file a revised motion by May 22, 2023. Lead plaintiff filed his Revised Motion for Preliminary Approval of Settlement (the “Amended Motion”) on May 22, 2023, defendants filed a response in support of the Amended Motion on June 5, 2023, and the lead plaintiff submitted his reply on June 12, 2023. The hearing on the Amended Motion took place on August 17, 2023 and the court preliminarily approved the settlement. In the event that the settlement does not go forward for any reason, the defendants intend to continue to defend the Karri Lawsuit vigorously. 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 September 30, 2023, 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 when 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 | 3 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Operating Segments and Geographic Information | Note 15. Operating Segments and Geographic Information Prior to fiscal year 2024, we operated in two reportable segments consisting of Optical Communications (“OpComms”) and Commercial Lasers (“Lasers”). During the fiscal first quarter of 2024, our chief operating decision maker (“CODM”) implemented changes in how he organizes the business, allocates resources, and assesses performance. We changed our organizational structure to better align with trends in our markets and our customer and product mix. Our new operating segments are Cloud & Networking and Industrial Tech. The Cloud & Networking segment includes the Telecom & Datacom product lines that were previously part of the OpComms segment. The Industrial Tech segment includes previous Lasers segment and the Industrial & Consumer product lines that were previously part of the OpComms segment. 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. In conjunction with this change, our CODM now evaluates each segment’s performance and allocates resources based on segment revenue and segment profit, instead of gross profit, as our CODM believes segment profit is a more comprehensive profitability measure for each operating segment. Segment profit includes operating expenses directly managed by operating segments, including research and development, and direct sales and marketing expenses. Segment profit does not include stock-based compensation, acquisition or integration related costs, amortization and impairment of acquisition-related intangible assets, restructuring and related charges, and certain other charges. Additionally, we do not allocate corporate marketing and strategic marketing expenses and general and administrative expenses, as these expenses are not directly attributable to our operating segments. Comparative prior period segment information has been recast to conform to the new segment structure and segment profitability measure. The change in our operating segments had no impact on our previously reported consolidated results of operations, financial condition, or cash flows. We do not track all of our property, plant and equipment by operating segments. The geographic identification of these assets is set forth below. Cloud & Networking Our Cloud and Networking 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”), as well as artificial intelligence and machine learning (“AI/ML”). 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 cloud and networking 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 manufacturing of high-speed ethernet transceivers for use inside data centers. Industrial Tech Our Industrial Tech products include diode laser products such as 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. Industrial Tech products also include laser products 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. These applications range in output power from milliwatts to kilowatts and include ultraviolet, visible and infrared wavelengths. Our laser products serve our customers in markets and applications such as sheet metal processing, general manufacturing, solar cell processing, biotechnology, graphics and imaging, remote sensing, and precision machining such as drilling in printed circuit boards, wafer singulation, glass cutting and solar cell scribing. 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, solar cells, and other types of chips. Use of ultrafast lasers for micromachining applications is being driven primarily by the increasing use of renewable energy, consumer electronics and connected devices globally. Reportable Segments The two operating segments, Cloud & Networking and Industrial Tech, also represent our two reportable segments. Our CODM allocates resources and evaluates segment performance based on segment revenue and segment profit. The following table summarizes segment profit and a reconciliation to the consolidated income (loss) before income taxes for the periods presented ( in millions ). Comparative prior period segment information has been recast to conform to the new segment structure. Three Months Ended September 30, 2023 October 1, 2022 Net revenue: Cloud & Networking $ 229.7 $ 360.1 Industrial Tech 87.9 146.7 Net revenue $ 317.6 $ 506.8 Segment profit: Cloud & Networking $ 23.9 $ 101.7 Industrial Tech 15.3 68.8 Total segment profit 39.2 170.5 Unallocated corporate items: Selling, general and administrative (1) (28.6) (33.1) Stock-based compensation (32.1) (34.7) Stock-based compensation - acquisition related — (11.9) Amortization of acquired intangibles (29.0) (32.2) Amortization of acquired inventory fair value adjustments — (4.6) Acquisition related costs (4.0) (16.2) Integration related costs (11.3) (0.6) Restructuring and related charges (11.0) (9.3) Other charges, net (2) (4.0) (14.4) Interest expense (9.7) (8.5) Other income, net (3) 21.2 13.8 Consolidated income (loss) before income taxes $ (69.3) $ 18.8 (1) We do not allocate selling, general and administrative expenses that are not directly attributable to our operating segments. (2) Other charges, net for the three months ended September 30, 2023 primarily relate to $2.9 million of incremental costs of sales related to components previously acquired from various brokers to satisfy customer demand. Other charges, net for the three months ended October 1, 2022 primarily relate to $7.3 million of charges to acquire components from various brokers to satisfy customer demand, $3.3 million of legal and professional fees, and $1.2 million of costs related to newly implemented employee benefit program. (3) Other income, net for the three months ended September 30, 2023 includes $21.7 million of interest and investment income, offset by $0.5 million of net foreign exchange losses. Other income, net the three months ended October 1, 2022 includes $9.0 million of net foreign exchange gains and $4.8 million of interest and investment income. 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 September 30, 2023 October 1, 2022 Amount % of Total Amount % of Total Net revenue: Americas: United States $ 41.1 12.9 % $ 62.2 12.3 % Mexico 23.7 7.5 57.5 11.3 Other Americas 1.2 0.4 2.3 0.5 Total Americas $ 66.0 20.8 % $ 122.0 24.1 % Asia-Pacific: Hong Kong $ 64.9 20.4 % $ 77.6 15.3 % South Korea 25.0 7.9 67.7 13.4 Thailand 64.2 20.2 57.5 11.3 Other Asia-Pacific 64.9 20.4 133.7 26.4 Total Asia-Pacific $ 219.0 68.9 % $ 336.5 66.4 % EMEA $ 32.6 10.3 % $ 48.3 9.5 % Total net revenue $ 317.6 100.0 % $ 506.8 100.0 % During the three months ended September 30, 2023, our net revenue from a single customer that represented 10% or greater of the total net revenue was concentrated with three customers, who individually accounted for 15%, 13% and 10% of our total net revenue, respectively. During the three months ended October 1, 2022, our net revenue from a single customer that represented 10% or greater of total net revenue was concentrated with two customers, who individually accounted for 17% and 17% of our total net revenue, respectively. As of September 30, 2023, our accounts receivable from a single customer that represented 10% or greater of the total accounts receivable was concentrated with two customers, who individually accounted for 12% and 11% of gross accounts receivable, respectively. As of July 1, 2023, our accounts receivable from a single customer that represented 10% or greater of the total accounts receivable was concentrated with three customers, who individually accounted for 14%, 12% and 12% 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) : September 30, 2023 July 1, 2023 Property, plant and equipment, net United States $ 137.3 $ 134.7 Thailand 131.7 132.0 Japan 87.3 93.0 United Kingdom 66.3 38.2 China 38.5 42.1 Other countries 50.5 49.5 Total property, plant and equipment, net $ 511.6 $ 489.5 We purchase a portion of our inventory from contract manufacturers and vendors located primarily in Taiwan, Thailand and Malaysia. During the three months ended September 30, 2023, our net inventory purchases from a single contract manufacturer that represented 10% or greater of our total net inventory purchases were concentrated with one contract manufacturer, who accounted for 45% of the total net inventory purchases. During the three months ended October 1, 2022, our net inventory purchases from a single contract manufacturer that represented 10% or greater of our total net inventory purchases were concentrated with two contract manufacturers, who collectively accounted for 51% of total net inventory purchases. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Sep. 30, 2023 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue Recognition | Note 16. Revenue Recognition Disaggregation of Revenue We disaggregate revenue by segment 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 millions, except percentage data ): Three Months Ended September 30, 2023 October 1, 2022 Amount % of Total Amount % of Total Cloud & Networking $ 229.7 72.3 % $ 360.1 71.1 % Industrial Tech 87.9 27.7 % 146.7 28.9 % Net revenue $ 317.6 100.0 % $ 506.8 100.0 % Contract Balances The following table reflects the changes in contract balances for the periods presented ( in millions, except percentages ): Contract balances Balance sheet location September 30, 2023 July 1, 2023 Change Percentage Change Accounts receivable, net Accounts receivable, net $ 220.0 $ 246.1 $ (26.1) (10.6) % Deferred revenue and customer deposits Other current liabilities $ 1.6 $ 2.1 $ (0.5) (23.8) % |
Subsequent Event
Subsequent Event | 3 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 17. Subsequent Event On October 30, 2023, Lumentum and Cloud Light Technology Limited (“Cloud Light”) announced a definitive merger agreement (the “Merger Agreement”), On November 7, 2023 (the “Closing date”), we completed the acquisition of Cloud Light. The acquisition will enable us to be well-positioned to serve the growing needs of cloud and networking customers, particularly those focused on optimizing their data center infrastructure for the demands of AI/ML. The total transaction value is approximately $750.0 million, subject to certain customary adjustments as specified in the Merger Agreement. We paid cash consideration of $706.6 million to shareholders of Cloud Light on the Closing date. Additionally, we converted each of Cloud Light’s outstanding options into options to acquire Lumentum common stock with equivalent value. During the three months ended September 30, 2023, we incurred $3.7 million of transaction costs related to this acquisition, which were recorded under selling, general and administrative expenses in our consolidated statement of operations. The acquisition will be accounted for as a business combination using the acquisition method of accounting, which requires, among other things, certain assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. We are currently evaluating the purchase accounting for this acquisition. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Pay vs Performance Disclosure | ||
Net loss | $ (67.9) | $ (0.4) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation We have prepared the accompanying condensed consolidated financial statements 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. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. 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. Prior to fiscal year 2024, we operated in two reportable segments consisting of Optical Communications (“OpComms”) and Commercial Lasers (“Lasers”). During the fiscal first quarter of 2024, we changed our organizational structure to better align with trends in our markets and our customer and product mix. Our new operating segments are Cloud & Networking and Industrial Tech. The Cloud & Networking segment includes the Telecom and Datacom product lines that were previously part of the OpComms segment. The Industrial Tech segment includes the previous Lasers segment and the Industrial & Consumer product lines that were previously part of the OpComms segment. Comparative prior period segment information has been recast to conform to the new segment structure and measures. The changes in our operating segments had no impact on our previously reported consolidated results of operations, financial condition, or cash flows. Refer to “Note 15. Operating Segments and Geographic Information” . |
Business Combinations | Business Combinations On August 3, 2022, we completed a merger with NeoPhotonics Corporation (“NeoPhotonics”). On August 15, 2022, we completed a transaction to acquire IPG Photonics’ telecom transmission product lines. We have applied the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations to account for both of the transactions . Refer to “Note 4. Business Combinations”. |
Fiscal Years | Fiscal Years We utilize a 52-53 week fiscal year ending on the Saturday closest to June 30 th . 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 2024 is a 52-week year ending on June 29, 2024, with the quarter ended September 30, 2023 being a 13-week quarterly period. Our fiscal 2023 was a 52-week year that ended on July 1, 2023, with the quarter ended October 1, 2022 being a 13-week quarterly period. |
Principles of Consolidation | Principles of ConsolidationThe 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. |
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 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 months ended September 30, 2023 and October 1, 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 (as defined below) 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 months ended September 30, 2023 and October 1, 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. |
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 2023, 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 months ended September 30, 2023. |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
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, 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) | 3 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share | The following table sets forth the computation of basic and diluted net loss per share ( in millions, except per share data ): Three Months Ended September 30, 2023 October 1, 2022 Numerator: Net loss - basic and diluted $ (67.9) $ (0.4) Denominator: Weighted average common shares outstanding - basic and diluted 66.7 68.1 Net loss per share: Basic $ (1.02) $ (0.01) Diluted $ (1.02) $ (0.01) |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes our final allocation of the purchase price consideration to the assets acquired and liabilities assumed as of the Closing date ( in millions ): Fair Value Total purchase price consideration $ 934.4 Assets acquired Cash and cash equivalents $ 92.9 Accounts receivable, net 66.8 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 5.4 Other non-current assets 1.9 Total assets 811.0 Liabilities assumed Accounts payable 79.6 Accrued payroll and related expenses 11.1 Accrued expenses 3.8 Other current liabilities 10.6 Operating lease liabilities, current 2.8 Operating lease liabilities, non-current 13.2 Deferred tax liability 38.3 Other non-current liabilities 32.5 Total liabilities 191.9 Goodwill $ 315.3 (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”. |
Cash, Cash Equivalents and Sh_2
Cash, Cash Equivalents and Short-term Investments (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023: Cash $ 156.3 $ — $ — $ 156.3 Cash equivalents: Commercial paper 4.8 — — 4.8 Money market funds 285.3 — — 285.3 U.S. Treasury securities 415.1 0.1 — 415.2 Total cash and cash equivalents $ 861.5 $ 0.1 $ — $ 861.6 Short-term investments: Certificates of deposit $ 29.6 $ — $ — $ 29.6 Commercial paper 119.2 — (0.1) 119.1 Corporate debt securities 459.4 — (3.2) 456.2 Municipal bonds 4.6 — — 4.6 U.S. Agency securities 194.7 — (1.4) 193.3 U.S. Treasury securities 281.4 — (1.5) 279.9 Total short-term investments $ 1,088.9 $ — $ (6.2) $ 1,082.7 July 1, 2023: Cash $ 254.3 $ — $ — $ 254.3 Cash equivalents: Money market funds 276.1 — — 276.1 U.S. Agency securities 4.0 — — 4.0 U.S. Treasury securities 324.6 — — 324.6 Total cash and cash equivalents $ 859.0 $ — $ — $ 859.0 Short-term investments: Certificates of deposit $ 16.5 $ — $ — $ 16.5 Commercial paper 132.9 — (0.2) 132.7 Corporate debt securities 472.7 — (3.9) 468.8 U.S. Agency securities 207.9 — (1.7) 206.2 U.S. Treasury securities 332.4 — (2.0) 330.4 Total short-term investments $ 1,162.4 $ — $ (7.8) $ 1,154.6 |
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 September 30, 2023: U.S. Agency securities $ 159.5 $ (1.2) $ 33.8 $ (0.2) $ (1.4) Certificates of deposit 11.7 — — — — Commercial paper 89.9 (0.1) — — (0.1) Corporate debt securities 351.3 (2.7) 68.7 (0.5) (3.2) Foreign government bonds 4.6 — — — — U.S. government bonds 215.4 (1.3) 22.9 (0.2) (1.5) Total $ 832.4 $ (5.3) $ 125.4 $ (0.9) $ (6.2) July 1, 2023: U.S. Agency securities $ 39.6 $ (0.4) $ 170.6 $ (1.3) $ (1.7) Certificates of deposit — — $ 7.7 — — Commercial paper — — $ 128.5 (0.2) (0.2) Corporate debt securities 93.6 (1.2) $ 358.9 (2.7) (3.9) U.S. government bonds 50.8 (0.6) $ 221.4 (1.4) (2.0) Total $ 184.0 $ (2.2) $ 887.1 $ (5.6) $ (7.8) |
Schedule of Investments in Debt Securities by Contractual Maturities | The following table classifies our short-term investments by remaining maturities ( in millions ): September 30, 2023 July 1, 2023 Amortized Cost Fair Value Amortized Cost Fair Value Due in 1 year $ 735.8 $ 733.3 $ 762.9 $ 759.1 Due in 1 year through 5 years 353.1 349.4 399.5 395.5 $ 1,088.9 $ 1,082.7 $ 1,162.4 $ 1,154.6 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023: (1) Assets: Cash equivalents: Commercial paper $ — $ 4.8 $ — $ 4.8 Money market funds 285.3 — — 285.3 U.S. Treasury securities 415.2 — — 415.2 Short-term investments: Certificates of deposit — 29.6 — 29.6 Commercial paper — 119.1 — 119.1 Corporate debt securities — 456.2 — 456.2 Municipal bonds — 4.6 — 4.6 U.S. Agency securities — 193.3 — 193.3 U.S. Treasury securities 279.9 — — 279.9 Total assets $ 980.4 $ 807.6 $ — $ 1,788.0 (1) Excludes $156.3 million in cash held in our bank accounts as of September 30, 2023. Level 1 Level 2 Level 3 Total July 1, 2023: (1) Assets: Cash equivalents: Money market funds $ 276.1 $ — $ — $ 276.1 U.S. Agency securities — 4.0 — 4.0 U.S. Treasury securities 324.6 — — 324.6 Short-term investments: Certificates of deposit — 16.5 — 16.5 Commercial paper — 132.7 — 132.7 Corporate debt securities — 468.8 — 468.8 U.S. Agency securities — 206.2 — 206.2 U.S. Treasury securities 330.4 — — 330.4 Total assets $ 931.1 $ 828.2 $ — $ 1,759.3 (1) Excludes $254.3 million in cash held in our bank accounts as of July 1, 2023. |
Schedule of Fair Value Measurements, Recurring and Nonrecurring | The carrying amounts and estimated fair values of the convertible notes are as follows for the periods presented ( in millions ): September 30, 2023 July 1, 2023 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value 2029 Notes $ 598.8 $ 553.2 $ 598.6 $ 625.2 2028 Notes 855.9 630.8 855.5 677.8 2026 Notes 1,046.2 885.1 1,045.9 933.2 2024 Notes 315.7 319.1 311.6 345.2 $ 2,816.6 $ 2,388.2 $ 2,811.6 $ 2,581.4 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Components of Inventories | The components of inventories were as follows ( in millions ): September 30, 2023 July 1, 2023 Raw materials and purchased parts $ 173.3 $ 170.5 Work in process 113.4 103.2 Finished goods 141.3 134.9 Inventories $ 428.0 $ 408.6 |
Schedule of Components of Property, Plant and Equipment, Net | The components of property, plant and equipment, net were as follows ( in millions ): September 30, 2023 July 1, 2023 Land $ 75.2 $ 63.5 Buildings and improvements 188.1 170.3 Machinery and equipment 665.8 657.9 Computer equipment and software 42.6 41.4 Furniture and fixtures 11.0 10.2 Leasehold improvements 41.8 49.6 Construction in progress 79.8 69.2 1,104.3 1,062.1 Less: Accumulated depreciation (592.7) (572.6) Property, plant and equipment, net $ 511.6 $ 489.5 |
Schedule of Operating Lease, Right-of-Use Assets, Net | Operating lease right-of-use assets, net were as follows ( in millions ): September 30, 2023 July 1, 2023 Operating lease right-of-use assets $ 104.1 $ 116.5 Less: accumulated amortization (35.3) (39.2) Operating lease right-of-use assets, net $ 68.8 $ 77.3 |
Schedule of Components of Other Current Liabilities | The components of other current liabilities were as follows (in millions) : September 30, 2023 July 1, 2023 Restructuring accrual and related charges (1) $ 9.3 $ 5.0 Warranty accrual (2) 5.5 6.8 Deferred revenue and customer deposits 1.6 2.1 Income tax payable (3) 10.7 28.0 Other current liabilities 4.2 5.9 Other current liabilities $ 31.3 $ 47.8 (1) Refer to “Note 11. Restructuring and Related Charges.” (2) Refer to “Note 14. Commitments and Contingencies.” |
Schedule of Components of Other Non-Current Liabilities | The components of other non-current liabilities were as follows ( in millions ): September 30, 2023 July 1, 2023 Asset retirement obligations $ 7.5 $ 8.2 Pension and related accruals (1) 10.1 9.6 Unrecognized tax benefit 59.5 64.4 Other non-current liabilities 8.6 9.2 Other non-current liabilities $ 85.7 $ 91.4 (1) We have defined benefit pension plans in Japan, Switzerland, and Thailand. Pension and related accrual of $10.1 million as of September 30, 2023 relates to $10.2 million of non-current portion of benefit obligation, offset by $0.1 million of funding for the pension plan in Switzerland. Pension and related accrual of $9.6 million as of July 1, 2023 relates to $10.2 million of non-current portion of benefit obligation, offset by $0.6 million of funding for the pension plan in Switzerland. We typically re-evaluate the assumptions related to the fair value of our defined benefit obligations annually in the fiscal fourth quarter and make any updates as necessary. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill | The following table presents our goodwill by reportable segments as of September 30, 2023 and July 1, 2023 ( in millions) : Cloud & Networking Industrial Tech Total Balances as of September 30, 2023 and July 1, 2023 $ 683.9 $ 11.2 $ 695.1 |
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 period ): Fair Value At The Acquisition Date Weighted Average Amortization Period NeoPhotonics IPG Telecom Transmission 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 all of our intangibles as of the periods presented ( in millions, except for weighted average remaining amortization period ): September 30, 2023 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Weighted Average Remaining Amortization Period (Years) Acquired developed technologies $ 636.4 $ (404.4) $ 232.0 4.0 Customer relationships 289.7 (126.9) 162.8 3.5 In-process research and development 40.4 — 40.4 n/a Total intangible assets $ 966.5 $ (531.3) $ 435.2 July 1, 2023 Gross Carrying Amounts Accumulated Amortization Net Carrying Amounts Weighted Average Remaining Amortization Period (Years) Acquired developed technologies $ 630.9 $ (385.5) $ 245.4 4.2 Customer relationships 289.7 (116.8) 172.9 3.7 In-process research and development 40.9 — 40.9 n/a Total intangible assets $ 961.5 $ (502.3) $ 459.2 |
Schedule of Amortization Expense | The following table presents details of amortization for the periods presented (in millions ): Three Months Ended September 30, 2023 October 1, 2022 Cost of sales $ 18.0 $ 22.9 Research and development 0.3 — Selling, general and administrative 10.7 9.3 Total amortization of intangibles $ 29.0 $ 32.2 |
Schedule of Estimated Future Amortization Expense | Based on the carrying amount of our acquired developed technologies and customer relationships as of September 30, 2023, and assuming no future impairment of the underlying assets, the estimated future amortization is as follows (in millions) : Fiscal Years Remainder of 2024 $ 83.4 2025 98.6 2026 89.0 2027 76.2 2028 38.1 Thereafter 9.5 Total future amortization $ 394.8 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes | Our convertible notes consisted of the following components as of the periods presented ( in millions ): September 30, 2023 2024 Notes (1) 2026 Notes (2) 2028 Notes (3) 2029 Notes (4) Total Principal $ 323.1 $ 1,050.0 $ 861.0 $ 603.7 $ 2,837.8 Unamortized debt discount and debt issuance costs (7.4) (3.8) (5.1) (4.9) (21.2) Net carrying amount of the liability component $ 315.7 $ 1,046.2 $ 855.9 $ 598.8 $ 2,816.6 July 1, 2023 2024 Notes (1) 2026 Notes (2) 2028 Notes (3) 2029 Notes (4) Total Principal $ 323.1 $ 1,050.0 $ 861.0 $ 603.7 $ 2,837.8 Unamortized debt discount and debt issuance costs (11.5) (4.1) (5.5) (5.1) (26.2) Net carrying amount of the liability component $ 311.6 $ 1,045.9 $ 855.5 $ 598.6 $ 2,811.6 (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. The 2024 Notes are classified as current liabilities as the debt will mature on March 15, 2024. (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. (4 ) If the closing price of our stock exceeds $90.40 (or 130% of the conversion price of $69.54) for 20 of the last 30 trading days of any future quarter, the 2029 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 consolidated balance sheets. |
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 September 30, 2023 October 1, 2022 Contractual interest expense $ 4.8 $ 2.7 Amortization of the debt discount and debt issuance costs 4.9 5.7 Total interest expense $ 9.7 $ 8.4 |
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 September 30, 2023 (in millions) : Fiscal Years 2024 Notes 2026 Notes 2028 Notes 2029 Notes Total 2024 $ 323.7 $ 5.3 $ 4.3 $ 9.1 $ 342.4 2025 — 5.3 4.3 9.1 18.7 2026 — 5.3 4.3 9.1 18.7 2027 — 1,052.5 4.3 9.1 1,065.9 2028 — — 865.3 9.1 874.4 Thereafter — — — 617.1 617.1 Total payments $ 323.7 $ 1,068.4 $ 882.5 $ 662.6 $ 2,937.2 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss), net of tax, 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 (3) Total Beginning balance as of July 1, 2023 $ 10.4 $ (0.4) $ (5.9) $ 4.1 Other comprehensive gain (loss), net (0.2) — 1.3 1.1 Ending balance as of September 30, 2023 $ 10.2 $ (0.4) $ (4.6) $ 5.2 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 (3) Total Beginning balance as of July 2, 2022 $ 9.7 $ 1.0 $ (10.3) $ 0.4 Other comprehensive loss, net — — (0.6) (0.6) Ending balance as of October 1, 2022 $ 9.7 $ 1.0 $ (10.9) $ (0.2) (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. In fiscal 2023, we acquired IPG telecom transmission product lines. The functional currency of the Brazilian entities acquired as part of this acquisition is the local currency. During the three months ended September 30, 2023, we recorded foreign currency translation adjustments of $0.2 million. (2) We re-evaluate the assumptions related to the fair value of our defined benefit obligations annually in the fiscal fourth quarter and make any updates as necessary. (3) For the three months ended September 30, 2023 and October 1, 2022, our unrealized loss on available-for-sale securities is presented net of tax of $0.4 million and $0.2 million , respectively. |
Restructuring and Related Cha_2
Restructuring and Related Charges (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Activity of Restructuring and Related Charges | The following table summarizes activities of restructuring and related charges for the periods as presented ( in millions ): Three Months Ended September 30, 2023 October 1, 2022 Balance as of beginning of period $ 5.0 $ — Charges 11.0 9.3 Payments (6.7) (6.2) Balance as of end of period $ 9.3 $ 3.1 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 October 1, 2022 Cost of sales $ 6.0 $ 5.5 Research and development 10.3 9.6 Selling, general and administrative 15.8 31.5 Total stock-based compensation $ 32.1 $ 46.6 |
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 periods presented was as follows (in millions) : Three Months Ended September 30, 2023 October 1, 2022 Income tax benefit associated with stock-based compensation $ 1.9 $ 5.1 |
Schedule of Awards Activity | The following table summarizes our award activities for the three months ended September 30, 2023 (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 1, 2023 2.6 $ 85.0 0.6 $ 89.1 Granted 1.7 52.9 0.7 53.3 Vested (0.7) 88.9 (0.2) 89.5 Canceled (0.1) 81.2 — 90.1 Balance as of September 30, 2023 3.5 $ 68.0 1.1 $ 65.9 |
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 1, 2023 2.7 Granted (2.4) Canceled 0.1 Balance as of September 30, 2023 0.4 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 October 1, 2022 Balance as of beginning of period $ 6.8 $ 10.0 Warranties assumed in NeoPhotonics merger — 0.7 Provision for warranty 0.2 1.5 Utilization of reserve (1.5) (2.1) Balance as of end of period $ 5.5 $ 10.1 |
Operating Segments and Geogra_2
Operating Segments and Geographic Information (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Information on Reportable Segments | Comparative prior period segment information has been recast to conform to the new segment structure. Three Months Ended September 30, 2023 October 1, 2022 Net revenue: Cloud & Networking $ 229.7 $ 360.1 Industrial Tech 87.9 146.7 Net revenue $ 317.6 $ 506.8 Segment profit: Cloud & Networking $ 23.9 $ 101.7 Industrial Tech 15.3 68.8 Total segment profit 39.2 170.5 Unallocated corporate items: Selling, general and administrative (1) (28.6) (33.1) Stock-based compensation (32.1) (34.7) Stock-based compensation - acquisition related — (11.9) Amortization of acquired intangibles (29.0) (32.2) Amortization of acquired inventory fair value adjustments — (4.6) Acquisition related costs (4.0) (16.2) Integration related costs (11.3) (0.6) Restructuring and related charges (11.0) (9.3) Other charges, net (2) (4.0) (14.4) Interest expense (9.7) (8.5) Other income, net (3) 21.2 13.8 Consolidated income (loss) before income taxes $ (69.3) $ 18.8 (1) We do not allocate selling, general and administrative expenses that are not directly attributable to our operating segments. (2) Other charges, net for the three months ended September 30, 2023 primarily relate to $2.9 million of incremental costs of sales related to components previously acquired from various brokers to satisfy customer demand. Other charges, net for the three months ended October 1, 2022 primarily relate to $7.3 million of charges to acquire components from various brokers to satisfy customer demand, $3.3 million of legal and professional fees, and $1.2 million of costs related to newly implemented employee benefit program. (3) Other income, net for the three months ended September 30, 2023 includes $21.7 million of interest and investment income, offset by $0.5 million of net foreign exchange losses. Other income, net |
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 September 30, 2023 October 1, 2022 Amount % of Total Amount % of Total Net revenue: Americas: United States $ 41.1 12.9 % $ 62.2 12.3 % Mexico 23.7 7.5 57.5 11.3 Other Americas 1.2 0.4 2.3 0.5 Total Americas $ 66.0 20.8 % $ 122.0 24.1 % Asia-Pacific: Hong Kong $ 64.9 20.4 % $ 77.6 15.3 % South Korea 25.0 7.9 67.7 13.4 Thailand 64.2 20.2 57.5 11.3 Other Asia-Pacific 64.9 20.4 133.7 26.4 Total Asia-Pacific $ 219.0 68.9 % $ 336.5 66.4 % EMEA $ 32.6 10.3 % $ 48.3 9.5 % Total net revenue $ 317.6 100.0 % $ 506.8 100.0 % |
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) : September 30, 2023 July 1, 2023 Property, plant and equipment, net United States $ 137.3 $ 134.7 Thailand 131.7 132.0 Japan 87.3 93.0 United Kingdom 66.3 38.2 China 38.5 42.1 Other countries 50.5 49.5 Total property, plant and equipment, net $ 511.6 $ 489.5 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
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 millions, except percentage data ): Three Months Ended September 30, 2023 October 1, 2022 Amount % of Total Amount % of Total Cloud & Networking $ 229.7 72.3 % $ 360.1 71.1 % Industrial Tech 87.9 27.7 % 146.7 28.9 % Net revenue $ 317.6 100.0 % $ 506.8 100.0 % |
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 September 30, 2023 July 1, 2023 Change Percentage Change Accounts receivable, net Accounts receivable, net $ 220.0 $ 246.1 $ (26.1) (10.6) % Deferred revenue and customer deposits Other current liabilities $ 1.6 $ 2.1 $ (0.5) (23.8) % |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Details) | 3 Months Ended |
Sep. 30, 2023 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Recently Issued Accounting Pr_3
Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 | Jul. 03, 2022 | Jul. 02, 2022 |
New Accounting Pronouncements or Change in Accounting Principle | ||||
Convertible notes, non-current | $ 2,500.9 | $ 2,500 | ||
Additional paid-in capital | (1,714) | (1,692.2) | $ (1,577.1) | $ (2,003.6) |
Deferred tax asset | 128 | 116.3 | ||
Accumulated deficit | $ (408.5) | $ (340.6) | (43.5) | $ (129.1) |
Cumulative Effect, Period of Adoption, Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Convertible notes, non-current | 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 | Sep. 30, 2023 | Jul. 01, 2023 | Jul. 02, 2022 |
New Accounting Pronouncements or Change in Accounting Principle | ||||
Short Term Debt - 2024 Notes | $ 315.7 | $ 311.6 | ||
Long Term Debt | 2,500.9 | 2,500 | ||
Additional Paid-In Capital | $ 1,577.1 | 1,714 | 1,692.2 | $ 2,003.6 |
Accumulated Deficit | 43.5 | $ 408.5 | $ 340.6 | 129.1 |
Deferred Tax Asset, Net | 105 | 12.9 | ||
Short Term Debt - 2024 Notes | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Short Term Debt - 2024 Notes | 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, 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 Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Numerator: | ||
Net loss | $ (67.9) | $ (0.4) |
Net loss - Basic | (67.9) | (0.4) |
Net loss - Diluted | $ (67.9) | $ (0.4) |
Denominator: | ||
Weighted average common shares outstanding - basic (in shares) | 66.7 | 68.1 |
Weighted average common shares outstanding - diluted (in shares) | 66.7 | 68.1 |
Net loss per share: | ||
Basic (in usd per share) | $ (1.02) | $ (0.01) |
Diluted (in usd per share) | $ (1.02) | $ (0.01) |
Earnings Per Share - Anti-dilut
Earnings Per Share - Anti-dilutive Potential Shares (Details) - shares shares in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Convertible Debt Securities | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive shares (in shares) | 31.2 | 24.5 |
Restricted Stock Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive shares (in shares) | 4.6 | |
Restricted Stock Unit And Performance Share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive shares (in shares) | 4.1 | |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive shares (in shares) | 0.2 | 0.1 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | 24 Months Ended | |||||
Aug. 15, 2022 | Aug. 03, 2022 | Sep. 30, 2023 | Jul. 01, 2023 | Oct. 01, 2022 | Jul. 01, 2023 | Jul. 02, 2022 | Jul. 01, 2023 | |
Business Acquisition | ||||||||
Goodwill | $ 695.1 | $ 695.1 | $ 695.1 | $ 695.1 | ||||
Business acquisition, pro forma revenue | $ 530.7 | |||||||
Business acquisition, pro forma net income | 32.4 | |||||||
Acquired developed technologies | ||||||||
Business Acquisition | ||||||||
Acquired finite lived intangible assets | 228.6 | |||||||
Customer relationships | ||||||||
Business Acquisition | ||||||||
Acquired finite lived intangible assets | 146.8 | |||||||
NeoPhotonics | ||||||||
Business Acquisition | ||||||||
Goodwill | $ 315.3 | |||||||
Net revenue from date of acquisition | $ 72.8 | |||||||
Total purchase price consideration | 934.4 | |||||||
Transaction cost | $ 20.4 | $ 8.3 | 28.7 | |||||
Other non-current assets | 1.9 | |||||||
Other non-current liabilities | $ 32.5 | |||||||
NeoPhotonics | Acquired developed technologies | ||||||||
Business Acquisition | ||||||||
Acquired finite lived intangible assets | 220 | |||||||
NeoPhotonics | Customer relationships | ||||||||
Business Acquisition | ||||||||
Acquired finite lived intangible assets | $ 144.5 | |||||||
IPG Photonics | ||||||||
Business Acquisition | ||||||||
Goodwill | $ 10.9 | |||||||
Total purchase price consideration | 55.9 | |||||||
Transaction cost | $ 1.6 | $ 0.4 | $ 2 | |||||
Other non-current assets | 5 | |||||||
Other non-current liabilities | 5 | |||||||
IPG Photonics | In-process research and development | ||||||||
Business Acquisition | ||||||||
Acquired finite lived intangible assets | 29.1 | |||||||
IPG Photonics | Acquired developed technologies | ||||||||
Business Acquisition | ||||||||
Acquired finite lived intangible assets | 8.6 | |||||||
IPG Photonics | Customer relationships | ||||||||
Business Acquisition | ||||||||
Acquired finite lived intangible assets | $ 2.3 |
Business Combinations - Assets
Business Combinations - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Aug. 03, 2022 | Sep. 30, 2023 | Jul. 01, 2023 |
Liabilities assumed | |||
Goodwill | $ 695.1 | $ 695.1 | |
NeoPhotonics | |||
Business Acquisition | |||
Total purchase price consideration | $ 934.4 | ||
Assets acquired | |||
Cash and cash equivalents | 92.9 | ||
Accounts receivable, net | 66.8 | ||
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 | 5.4 | ||
Other non-current assets | 1.9 | ||
Total assets | 811 | ||
Liabilities assumed | |||
Accounts payable | 79.6 | ||
Accrued payroll and related expenses | 11.1 | ||
Accrued expenses | 3.8 | ||
Other current liabilities | 10.6 | ||
Operating lease liabilities, current | 2.8 | ||
Operating lease liabilities, non-current | 13.2 | ||
Deferred tax liability | 38.3 | ||
Other non-current liabilities | 32.5 | ||
Total liabilities | 191.9 | ||
Goodwill | 315.3 | ||
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 |
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 | Sep. 30, 2023 | Jul. 01, 2023 |
Cash and cash equivalents: | ||
Cash | $ 156.3 | $ 254.3 |
Total cash and cash equivalents | 861.5 | 859 |
Cash and cash equivalents | 861.6 | 859 |
Short-term investments: | ||
Amortized Cost | 1,088.9 | 1,162.4 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (6.2) | (7.8) |
Fair Value | 1,082.7 | 1,154.6 |
Certificates of deposit | ||
Short-term investments: | ||
Amortized Cost | 29.6 | 16.5 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 29.6 | 16.5 |
Commercial paper | ||
Short-term investments: | ||
Amortized Cost | 119.2 | 132.9 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (0.1) | (0.2) |
Fair Value | 119.1 | 132.7 |
Corporate debt securities | ||
Short-term investments: | ||
Amortized Cost | 459.4 | 472.7 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (3.2) | (3.9) |
Fair Value | 456.2 | 468.8 |
Municipal bonds | ||
Short-term investments: | ||
Amortized Cost | 4.6 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 4.6 | |
U.S. Agency securities | ||
Short-term investments: | ||
Amortized Cost | 194.7 | 207.9 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1.4) | (1.7) |
Fair Value | 193.3 | 206.2 |
U.S. Treasury securities | ||
Short-term investments: | ||
Amortized Cost | 281.4 | 332.4 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1.5) | (2) |
Fair Value | 279.9 | 330.4 |
Commercial paper | ||
Cash and cash equivalents: | ||
Cash equivalents: | 4.8 | |
Cash and cash equivalents | 4.8 | |
Money market funds | ||
Cash and cash equivalents: | ||
Cash equivalents: | 285.3 | 276.1 |
Cash and cash equivalents | 285.3 | 276.1 |
U.S. Agency securities | ||
Cash and cash equivalents: | ||
Cash equivalents: | 4 | |
Cash and cash equivalents | 4 | |
U.S. Treasury securities | ||
Cash and cash equivalents: | ||
Cash equivalents: | 415.1 | 324.6 |
Cash and cash equivalents | 415.2 | $ 324.6 |
Short-term investments: | ||
Gross Unrealized Gains | $ 0.1 |
Cash, Cash Equivalents and Sh_4
Cash, Cash Equivalents and Short-term Investments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Jul. 01, 2023 | |
Cash and Cash Equivalents [Abstract] | |||
Other nonoperating income (expense) | $ 21.2 | $ 13.8 | |
Income on short-term investments and cash equivalents | 21.7 | $ 4.8 | |
Interest receivable in prepayments and other current assets | $ 8 | $ 6.7 |
Cash, Cash Equivalents and Sh_5
Cash, Cash Equivalents and Short-term Investments - Summary of Unrealized Losses (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss | ||
Fair Value, More Than 12 Months | $ 832.4 | $ 184 |
Unrealized Losses, More Than 12 Months | (5.3) | (2.2) |
Fair Value, Less Than 12 Months | 125.4 | 887.1 |
Unrealized Losses, Less Than 12 Months | (0.9) | (5.6) |
Gross Unrealized Losses | (6.2) | (7.8) |
U.S. Agency securities | ||
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss | ||
Fair Value, More Than 12 Months | 159.5 | 39.6 |
Unrealized Losses, More Than 12 Months | (1.2) | (0.4) |
Fair Value, Less Than 12 Months | 33.8 | 170.6 |
Unrealized Losses, Less Than 12 Months | (0.2) | (1.3) |
Gross Unrealized Losses | (1.4) | (1.7) |
Certificates of deposit | ||
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss | ||
Fair Value, More Than 12 Months | 11.7 | 0 |
Unrealized Losses, More Than 12 Months | 0 | 0 |
Fair Value, Less Than 12 Months | 0 | 7.7 |
Unrealized Losses, Less Than 12 Months | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Commercial paper | ||
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss | ||
Fair Value, More Than 12 Months | 89.9 | 0 |
Unrealized Losses, More Than 12 Months | (0.1) | 0 |
Fair Value, Less Than 12 Months | 0 | 128.5 |
Unrealized Losses, Less Than 12 Months | 0 | (0.2) |
Gross Unrealized Losses | (0.1) | (0.2) |
Corporate debt securities | ||
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss | ||
Fair Value, More Than 12 Months | 351.3 | 93.6 |
Unrealized Losses, More Than 12 Months | (2.7) | (1.2) |
Fair Value, Less Than 12 Months | 68.7 | 358.9 |
Unrealized Losses, Less Than 12 Months | (0.5) | (2.7) |
Gross Unrealized Losses | (3.2) | (3.9) |
Foreign government bonds | ||
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss | ||
Fair Value, More Than 12 Months | 4.6 | |
Unrealized Losses, More Than 12 Months | 0 | |
Fair Value, Less Than 12 Months | 0 | |
Unrealized Losses, Less Than 12 Months | 0 | |
Gross Unrealized Losses | 0 | |
U.S. government bonds | ||
Debt Securities, Available-for-Sale, Unrealized Loss Position, Accumulated Loss | ||
Fair Value, More Than 12 Months | 215.4 | 50.8 |
Unrealized Losses, More Than 12 Months | (1.3) | (0.6) |
Fair Value, Less Than 12 Months | 22.9 | 221.4 |
Unrealized Losses, Less Than 12 Months | (0.2) | (1.4) |
Gross Unrealized Losses | $ (1.5) | $ (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 | Sep. 30, 2023 | Jul. 01, 2023 |
Amortized Cost | ||
Due in 1 year | $ 735.8 | $ 762.9 |
Due in 1 year through 5 years | 353.1 | 399.5 |
Total | 1,088.9 | 1,162.4 |
Fair Value | ||
Due in 1 year | 733.3 | 759.1 |
Due in 1 year through 5 years | 349.4 | 395.5 |
Total | $ 1,082.7 | $ 1,154.6 |
Fair Value Measurements - Measu
Fair Value Measurements - Measured on a Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Assets: | ||
Cash and cash equivalents | $ 861.6 | $ 859 |
Short-term investments: | 1,082.7 | 1,154.6 |
Cash held in bank | 156.3 | 254.3 |
Certificates of deposit | ||
Assets: | ||
Short-term investments: | 29.6 | 16.5 |
Commercial paper | ||
Assets: | ||
Short-term investments: | 119.1 | 132.7 |
Corporate debt securities | ||
Assets: | ||
Short-term investments: | 456.2 | 468.8 |
Municipal bonds | ||
Assets: | ||
Short-term investments: | 4.6 | |
U.S. Agency securities | ||
Assets: | ||
Short-term investments: | 193.3 | 206.2 |
U.S. Treasury securities | ||
Assets: | ||
Short-term investments: | 279.9 | 330.4 |
Commercial paper | ||
Assets: | ||
Cash and cash equivalents | 4.8 | |
Money market funds | ||
Assets: | ||
Cash and cash equivalents | 285.3 | 276.1 |
U.S. Agency securities | ||
Assets: | ||
Cash and cash equivalents | 4 | |
U.S. Treasury securities | ||
Assets: | ||
Cash and cash equivalents | 415.2 | 324.6 |
Recurring Basis | ||
Assets: | ||
Total assets | 1,788 | 1,759.3 |
Recurring Basis | Certificates of deposit | ||
Assets: | ||
Short-term investments: | 29.6 | 16.5 |
Recurring Basis | Commercial paper | ||
Assets: | ||
Short-term investments: | 119.1 | 132.7 |
Recurring Basis | Corporate debt securities | ||
Assets: | ||
Short-term investments: | 456.2 | 468.8 |
Recurring Basis | Municipal bonds | ||
Assets: | ||
Short-term investments: | 4.6 | |
Recurring Basis | U.S. Agency securities | ||
Assets: | ||
Short-term investments: | 193.3 | 206.2 |
Recurring Basis | U.S. Treasury securities | ||
Assets: | ||
Short-term investments: | 279.9 | 330.4 |
Recurring Basis | Commercial paper | ||
Assets: | ||
Cash and cash equivalents | 4.8 | |
Recurring Basis | Money market funds | ||
Assets: | ||
Cash and cash equivalents | 285.3 | 276.1 |
Recurring Basis | U.S. Agency securities | ||
Assets: | ||
Cash and cash equivalents | 4 | |
Recurring Basis | U.S. Treasury securities | ||
Assets: | ||
Cash and cash equivalents | 415.2 | 324.6 |
Recurring Basis | Level 1 | ||
Assets: | ||
Total assets | 980.4 | 931.1 |
Recurring Basis | Level 1 | Certificates of deposit | ||
Assets: | ||
Short-term investments: | 0 | 0 |
Recurring Basis | Level 1 | Commercial paper | ||
Assets: | ||
Short-term investments: | 0 | 0 |
Recurring Basis | Level 1 | Corporate debt securities | ||
Assets: | ||
Short-term investments: | 0 | 0 |
Recurring Basis | Level 1 | Municipal bonds | ||
Assets: | ||
Short-term investments: | 0 | |
Recurring Basis | Level 1 | U.S. Agency securities | ||
Assets: | ||
Short-term investments: | 0 | 0 |
Recurring Basis | Level 1 | U.S. Treasury securities | ||
Assets: | ||
Short-term investments: | 279.9 | 330.4 |
Recurring Basis | Level 1 | Commercial paper | ||
Assets: | ||
Cash and cash equivalents | 0 | |
Recurring Basis | Level 1 | Money market funds | ||
Assets: | ||
Cash and cash equivalents | 285.3 | 276.1 |
Recurring Basis | Level 1 | U.S. Agency securities | ||
Assets: | ||
Cash and cash equivalents | 0 | |
Recurring Basis | Level 1 | U.S. Treasury securities | ||
Assets: | ||
Cash and cash equivalents | 415.2 | 324.6 |
Recurring Basis | Level 2 | ||
Assets: | ||
Total assets | 807.6 | 828.2 |
Recurring Basis | Level 2 | Certificates of deposit | ||
Assets: | ||
Short-term investments: | 29.6 | 16.5 |
Recurring Basis | Level 2 | Commercial paper | ||
Assets: | ||
Short-term investments: | 119.1 | 132.7 |
Recurring Basis | Level 2 | Corporate debt securities | ||
Assets: | ||
Short-term investments: | 456.2 | 468.8 |
Recurring Basis | Level 2 | Municipal bonds | ||
Assets: | ||
Short-term investments: | 4.6 | |
Recurring Basis | Level 2 | U.S. Agency securities | ||
Assets: | ||
Short-term investments: | 193.3 | 206.2 |
Recurring Basis | Level 2 | U.S. Treasury securities | ||
Assets: | ||
Short-term investments: | 0 | 0 |
Recurring Basis | Level 2 | Commercial paper | ||
Assets: | ||
Cash and cash equivalents | 4.8 | |
Recurring Basis | Level 2 | Money market funds | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Recurring Basis | Level 2 | U.S. Agency securities | ||
Assets: | ||
Cash and cash equivalents | 4 | |
Recurring Basis | Level 2 | U.S. Treasury securities | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Recurring Basis | Level 3 | ||
Assets: | ||
Total assets | 0 | 0 |
Recurring Basis | Level 3 | Certificates of deposit | ||
Assets: | ||
Short-term investments: | 0 | 0 |
Recurring Basis | Level 3 | Commercial paper | ||
Assets: | ||
Short-term investments: | 0 | 0 |
Recurring Basis | Level 3 | Corporate debt securities | ||
Assets: | ||
Short-term investments: | 0 | 0 |
Recurring Basis | Level 3 | Municipal bonds | ||
Assets: | ||
Short-term investments: | 0 | |
Recurring Basis | Level 3 | U.S. Agency securities | ||
Assets: | ||
Short-term investments: | 0 | 0 |
Recurring Basis | Level 3 | U.S. Treasury securities | ||
Assets: | ||
Short-term investments: | 0 | 0 |
Recurring Basis | Level 3 | Commercial paper | ||
Assets: | ||
Cash and cash equivalents | 0 | |
Recurring Basis | Level 3 | Money market funds | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Recurring Basis | Level 3 | U.S. Agency securities | ||
Assets: | ||
Cash and cash equivalents | 0 | |
Recurring Basis | Level 3 | U.S. Treasury securities | ||
Assets: | ||
Cash and cash equivalents | $ 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 | Sep. 30, 2023 | Jul. 01, 2023 | Mar. 31, 2022 | Dec. 31, 2019 |
2028 Notes | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | $ 629.8 | |||
2026 Notes | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | $ 734.8 | |||
Level 2 | Carrying Amount | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | $ 2,816.6 | $ 2,811.6 | ||
Level 2 | Estimated Fair Value | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | 2,388.2 | 2,581.4 | ||
Level 2 | 2029 Notes | Carrying Amount | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | 598.8 | 598.6 | ||
Level 2 | 2029 Notes | Estimated Fair Value | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | 553.2 | 625.2 | ||
Level 2 | 2028 Notes | Carrying Amount | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | 855.9 | 855.5 | ||
Level 2 | 2028 Notes | Estimated Fair Value | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | 630.8 | 677.8 | ||
Level 2 | 2026 Notes | Carrying Amount | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | 1,046.2 | 1,045.9 | ||
Level 2 | 2026 Notes | Estimated Fair Value | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | 885.1 | 933.2 | ||
Level 2 | 2024 Notes | Carrying Amount | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | 315.7 | 311.6 | ||
Level 2 | 2024 Notes | Estimated Fair Value | ||||
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings | ||||
Convertible senior notes fair value | $ 319.1 | $ 345.2 |
Balance Sheet Details - Narrati
Balance Sheet Details - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Aug. 31, 2023 | Sep. 30, 2023 | Oct. 01, 2022 | Jul. 01, 2023 | |
Property, Plant and Equipment | ||||
Accounts receivable allowance for credit losses | $ 0.3 | $ 0.1 | ||
Payments to acquire land and buildings | 57.8 | $ 22.9 | ||
Property plant and equipment, net | 511.6 | $ 489.5 | ||
Depreciation expense | $ 28.2 | $ 24.5 | ||
Decrease in operating lease right-of-use assets, net | $ 4.8 | |||
Decrease in operating lease liability current | 2.4 | |||
Decrease in operating lease liability non-current | 2.7 | |||
Land and Building In Caswell UK | ||||
Property, Plant and Equipment | ||||
Payments to acquire land and buildings | 23.3 | |||
Capitalized asset acquisition cost | 1.8 | |||
Impairment of real estate | 0.3 | |||
Property plant and equipment, net | 24.8 | |||
Land and Building In Caswell UK | Land | ||||
Property, Plant and Equipment | ||||
Property plant and equipment, net | 11.8 | |||
Land and Building In Caswell UK | Building | ||||
Property, Plant and Equipment | ||||
Property plant and equipment, net | $ 13 |
Balance Sheet Details - Invento
Balance Sheet Details - Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Inventory, Net | ||
Raw materials and purchased parts | $ 173.3 | $ 170.5 |
Work in process | 113.4 | 103.2 |
Finished goods | 141.3 | 134.9 |
Inventories | $ 428 | $ 408.6 |
Balance Sheet Details - Propert
Balance Sheet Details - Property, Plant and Equipment, Net (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 1,104.3 | $ 1,062.1 |
Less: Accumulated depreciation | (592.7) | (572.6) |
Property, plant and equipment, net | 511.6 | 489.5 |
Land | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 75.2 | 63.5 |
Buildings and improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 188.1 | 170.3 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 665.8 | 657.9 |
Computer equipment and software | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 42.6 | 41.4 |
Furniture and fixtures | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 11 | 10.2 |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 41.8 | 49.6 |
Construction in progress | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 79.8 | $ 69.2 |
Balance Sheet Details - Operati
Balance Sheet Details - Operating Lease Right-of-Use Assets (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Assets and Liabilities, Lessee | ||
Operating lease right-of-use assets | $ 104.1 | $ 116.5 |
Less: accumulated amortization | (35.3) | (39.2) |
Operating lease right-of-use assets, net | $ 68.8 | $ 77.3 |
Balance Sheet Details - Other C
Balance Sheet Details - Other Current Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 | Oct. 01, 2022 | Jul. 02, 2022 |
Other Liabilities, Current | ||||
Restructuring accrual and related charges | $ 9.3 | $ 5 | $ 3.1 | $ 0 |
Warranty accrual | 5.5 | 6.8 | ||
Deferred revenue and customer deposits | 1.6 | 2.1 | ||
Income tax payable | 10.7 | 28 | ||
Other current liabilities | 4.2 | 5.9 | ||
Other current liabilities | $ 31.3 | $ 47.8 |
Balance Sheet Details - Other N
Balance Sheet Details - Other Non-Current Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Other Liabilities, Noncurrent | ||
Asset retirement obligations | $ 7.5 | $ 8.2 |
Pension and related accruals | 10.1 | 9.6 |
Unrecognized tax benefit | 59.5 | 64.4 |
Other non-current liabilities | 8.6 | 9.2 |
Other non-current liabilities | 85.7 | 91.4 |
Foreign Plan | ||
Other Liabilities, Noncurrent | ||
Defined benefit plan obligation non current | 10.2 | 10.2 |
Switzerland | ||
Other Liabilities, Noncurrent | ||
Noncurrent portion of benefit obligation | $ 0.1 | $ 0.6 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Aug. 31, 2023 business | Sep. 30, 2023 USD ($) | Jul. 01, 2023 USD ($) | Aug. 03, 2022 USD ($) | |
Goodwill | ||||
Number of businesses acquired (business) | business | 2 | |||
Goodwill | $ 695,100,000 | $ 695,100,000 | ||
Goodwill impairment | 0 | 0 | ||
Intangible assets acquired | 452,500,000 | |||
Cloud & Networking | ||||
Goodwill | ||||
Goodwill | 683,900,000 | 683,900,000 | ||
NeoPhotonics | ||||
Goodwill | ||||
Goodwill | $ 315,300,000 | |||
Intangible assets acquired | 412,500,000 | |||
IPG Telecom Transmission Product Lines | ||||
Goodwill | ||||
Intangible assets acquired | 40,000,000 | |||
IPG Telecom Transmission Product Lines | OpComms | ||||
Goodwill | ||||
Goodwill | $ 10,900,000 | $ 10,900,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Changes in Goodwill (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Changes in goodwill | |
Balance as of September 30, 2023 | $ 695.1 |
Balance as of July 1, 2023 | 695.1 |
Cloud & Networking | |
Changes in goodwill | |
Balance as of September 30, 2023 | 683.9 |
Balance as of July 1, 2023 | 683.9 |
Industrial Tech | |
Changes in goodwill | |
Balance as of September 30, 2023 | 11.2 |
Balance as of July 1, 2023 | $ 11.2 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Acquired Intangible Assets (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2023 USD ($) | |
Acquired Finite-Lived Intangible Assets | |
Total intangible assets | $ 452.5 |
NeoPhotonics | |
Acquired Finite-Lived Intangible Assets | |
Total intangible assets | 412.5 |
IPG Telecom Transmission Product Lines | |
Acquired Finite-Lived Intangible Assets | |
Total intangible assets | 40 |
Acquired developed technologies | |
Acquired Finite-Lived Intangible Assets | |
Acquired finite lived intangible assets | $ 228.6 |
Weighted Average Amortization Period (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 Telecom Transmission Product Lines | |
Acquired Finite-Lived Intangible Assets | |
Acquired finite lived intangible assets | 8.6 |
Customer relationships | |
Acquired Finite-Lived Intangible Assets | |
Acquired finite lived intangible assets | $ 146.8 |
Weighted Average Amortization Period (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 Telecom Transmission Product Lines | |
Acquired Finite-Lived Intangible Assets | |
Acquired finite lived intangible assets | 2.3 |
In-process research and development | |
Acquired Finite-Lived Intangible Assets | |
In-process research and development | 77.1 |
In-process research and development | NeoPhotonics | |
Acquired Finite-Lived Intangible Assets | |
In-process research and development | 48 |
In-process research and development | IPG Telecom Transmission Product Lines | |
Acquired Finite-Lived Intangible Assets | |
In-process research and development | $ 29.1 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Acquired Developed Technology and Other Intangibles (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Finite-Lived Intangible Assets | ||
Gross Carrying Amounts | $ 966.5 | $ 961.5 |
Accumulated Amortization | (531.3) | (502.3) |
Net Carrying Amounts | 435.2 | 459.2 |
Acquired developed technologies | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amounts | 636.4 | 630.9 |
Accumulated Amortization | (404.4) | (385.5) |
Net Carrying Amounts | $ 232 | $ 245.4 |
Weighted Average Remaining Amortization Period (Years) | 4 years | 4 years 2 months 12 days |
Customer relationships | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amounts | $ 289.7 | $ 289.7 |
Accumulated Amortization | (126.9) | (116.8) |
Net Carrying Amounts | $ 162.8 | $ 172.9 |
Weighted Average Remaining Amortization Period (Years) | 3 years 6 months | 3 years 8 months 12 days |
In-process research and development | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amounts | $ 40.9 | |
Accumulated Amortization | $ 0 | 0 |
Net Carrying Amounts | $ 40.9 | |
Indefinite-lived intangible asset (excluding goodwill) | $ 40.4 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Details of Amortization Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Finite-Lived Intangible Assets | ||
Total amortization of intangibles | $ 29 | $ 32.2 |
Cost of sales | ||
Finite-Lived Intangible Assets | ||
Total amortization of intangibles | 18 | 22.9 |
Research and development | ||
Finite-Lived Intangible Assets | ||
Total amortization of intangibles | 0.3 | 0 |
Selling, general and administrative | ||
Finite-Lived Intangible Assets | ||
Total amortization of intangibles | $ 10.7 | $ 9.3 |
Goodwill and Other Intangible_8
Goodwill and Other Intangible Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Fiscal Years | ||
Net Carrying Amounts | $ 435.2 | $ 459.2 |
Finite Lived Intangible Assets, Excluding In Process Research And Development | ||
Fiscal Years | ||
Remainder of 2024 | 83.4 | |
2025 | 98.6 | |
2026 | 89 | |
2027 | 76.2 | |
2028 | 38.1 | |
Thereafter | 9.5 | |
Net Carrying Amounts | $ 394.8 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 79 Months Ended | |||||||||
Jun. 16, 2023 USD ($) day $ / shares Rate | Mar. 31, 2022 USD ($) day $ / shares Rate | Dec. 31, 2019 USD ($) day $ / shares Rate | Mar. 31, 2017 USD ($) day $ / shares Rate | Sep. 30, 2023 USD ($) day $ / shares | Dec. 31, 2022 USD ($) | Oct. 01, 2022 USD ($) | Jul. 01, 2023 USD ($) | Sep. 30, 2023 USD ($) $ / shares | Jul. 03, 2022 USD ($) | Jul. 02, 2022 USD ($) | Nov. 03, 2021 USD ($) | Mar. 08, 2017 USD ($) | |
Debt Instrument | |||||||||||||
Repurchase of common stock | $ 0 | $ 35,800,000 | |||||||||||
Convertible notes, non-current | 2,500,900,000 | $ 2,500,000,000 | $ 2,500,900,000 | ||||||||||
Repayment of term loan | 0 | 900,000 | |||||||||||
Additional Paid-In Capital | |||||||||||||
Debt Instrument | |||||||||||||
Adjustments to additional paid in capital, equity component of reacquired notes | 13,500,000 | ||||||||||||
Convertible Debt | |||||||||||||
Debt Instrument | |||||||||||||
Debt, aggregate principal amount | 2,837,800,000 | 2,837,800,000 | 2,837,800,000 | ||||||||||
Discount | 21,200,000 | 26,200,000 | 21,200,000 | ||||||||||
Remaining principal balance | 2,937,200,000 | 2,937,200,000 | |||||||||||
2029 Notes | Convertible Debt | |||||||||||||
Debt Instrument | |||||||||||||
Debt, aggregate principal amount | $ 603,700,000 | $ 603,700,000 | 603,700,000 | $ 603,700,000 | |||||||||
Proceeds from convertible debt | 599,400,000 | ||||||||||||
Payments of debt issuance costs | 4,300,000 | ||||||||||||
Debt related professional fees | 800,000 | ||||||||||||
Payment for repurchase of convertible notes | 132,800,000 | ||||||||||||
Repurchase of common stock | $ 125,000,000 | ||||||||||||
Debt interest rate (as a percent) | 1.50% | ||||||||||||
Debt instrument conversion ratio | Rate | 1.43808% | ||||||||||||
Conversion price (in usd per share) | $ / shares | $ 69.54 | $ 69.54 | $ 69.54 | ||||||||||
Number of days to trigger conversion | day | 20 | 20 | |||||||||||
Conversion threshold consecutive trading days (in days) | day | 30 | 30 | |||||||||||
Conversion threshold percentage of stock price trigger (as a percent) | 130% | 130% | |||||||||||
Conversion threshold measurement period | 5 years | ||||||||||||
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% | ||||||||||||
Debt instrument redemption threshold | $ 100,000,000 | ||||||||||||
Sale price of common stock (in usd per share) | $ / shares | $ 90.40 | ||||||||||||
Discount | $ 4,900,000 | 5,100,000 | $ 4,900,000 | ||||||||||
Remaining principal balance | 662,600,000 | 662,600,000 | |||||||||||
2028 Notes | |||||||||||||
Debt Instrument | |||||||||||||
Convertible notes, non-current | $ 854,300,000 | $ 634,700,000 | |||||||||||
2028 Notes | Convertible Debt | |||||||||||||
Debt Instrument | |||||||||||||
Debt, aggregate principal amount | $ 861,000,000 | $ 861,000,000 | 861,000,000 | $ 861,000,000 | |||||||||
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 interest rate (as a percent) | 0.50% | ||||||||||||
Debt instrument conversion ratio | Rate | 0.76319% | ||||||||||||
Conversion price (in usd per share) | $ / shares | $ 131.03 | $ 131.03 | $ 131.03 | ||||||||||
Number of days to trigger conversion | day | 20 | 20 | |||||||||||
Conversion threshold consecutive trading days (in days) | day | 30 | 30 | |||||||||||
Conversion threshold percentage of stock price trigger (as a percent) | 130% | 130% | |||||||||||
Conversion threshold measurement period | 5 days | ||||||||||||
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% | ||||||||||||
Debt instrument redemption threshold | $ 100,000,000 | ||||||||||||
Sale price of common stock (in usd per share) | $ / shares | $ 170.34 | $ 170.34 | |||||||||||
Liability component | $ 629,800,000 | ||||||||||||
Effective interest rate percentage (as a percent) | 5.70% | ||||||||||||
Discount | $ 231,200,000 | $ 5,100,000 | 5,500,000 | $ 5,100,000 | |||||||||
Remaining principal balance | 882,500,000 | 882,500,000 | |||||||||||
2026 Notes | |||||||||||||
Debt Instrument | |||||||||||||
Sale price of common stock (in usd per share) | $ / shares | $ 129.08 | ||||||||||||
Convertible notes, non-current | $ 1,044,800,000 | $ 831,400,000 | |||||||||||
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 | |||||||||
Repurchase of common stock | $ 200,000,000 | ||||||||||||
Debt interest rate (as a percent) | 0.50% | ||||||||||||
Debt instrument conversion ratio | Rate | 1.00711% | ||||||||||||
Conversion price (in usd per share) | $ / shares | $ 99.29 | $ 99.29 | $ 99.29 | ||||||||||
Number of days to trigger conversion | day | 20 | ||||||||||||
Conversion threshold consecutive trading days (in days) | day | 30 | 30 | |||||||||||
Conversion threshold percentage of stock price trigger (as a percent) | 130% | 130% | |||||||||||
Conversion threshold measurement period | 5 days | ||||||||||||
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% | ||||||||||||
Sale price of common stock (in usd per share) | $ / shares | $ 129.08 | ||||||||||||
Liability component | $ 734,800,000 | ||||||||||||
Effective interest rate percentage (as a percent) | 5.80% | ||||||||||||
Discount | $ 315,200,000 | $ 3,800,000 | 4,100,000 | $ 3,800,000 | |||||||||
Repayments of debt | $ 196,000,000 | ||||||||||||
Conversion threshold trading days | day | 20 | ||||||||||||
Remaining principal balance | 1,068,400,000 | 1,068,400,000 | |||||||||||
2024 Notes | Convertible Debt | |||||||||||||
Debt Instrument | |||||||||||||
Debt, aggregate principal amount | $ 125,000,000 | $ 450,000,000 | $ 323,100,000 | 323,100,000 | $ 323,100,000 | ||||||||
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 | ||||||||||
Number of days to trigger conversion | day | 20 | ||||||||||||
Conversion threshold consecutive trading days (in days) | day | 30 | 30 | |||||||||||
Conversion threshold percentage of stock price trigger (as a percent) | 130% | 130% | |||||||||||
Conversion threshold measurement period | 5 days | ||||||||||||
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% | ||||||||||||
Sale price of common stock (in usd per share) | $ / shares | $ 78.80 | $ 78.80 | |||||||||||
Discount | $ 7,400,000 | 11,500,000 | $ 7,400,000 | ||||||||||
Conversion threshold trading days | day | 20 | ||||||||||||
Derivative liability fair value | $ 129,900,000 | ||||||||||||
Residual principal amount of notes before issuance costs | 320,100,000 | ||||||||||||
Debt issuance costs | $ 7,700,000 | ||||||||||||
Effective interest rate on the liability component | 5.40% | ||||||||||||
Convertible notes, non-current | 323,100,000 | $ 323,100,000 | 323,100,000 | ||||||||||
Principal amount of debt converted (less than) | 1,900,000 | ||||||||||||
Remaining principal balance | $ 323,700,000 | $ 323,700,000 | |||||||||||
2015 Mitsubishi Term Loan | Secured Debt | |||||||||||||
Debt Instrument | |||||||||||||
Fair value of debt acquired | $ 5,900,000 | ||||||||||||
Repayment of term loan | $ 5,000,000 | $ 900,000 |
Debt - Components of Convertibl
Debt - Components of Convertible Notes (Details) | 1 Months Ended | 3 Months Ended | ||||
Jun. 16, 2023 USD ($) day $ / shares | Mar. 31, 2022 USD ($) day $ / shares | Dec. 31, 2019 USD ($) day $ / shares | Mar. 31, 2017 USD ($) day $ / shares | Sep. 30, 2023 USD ($) day $ / shares | Jul. 01, 2023 USD ($) | |
2026 Notes | ||||||
Liability component: | ||||||
Sale price of common stock (in usd per share) | $ / shares | $ 129.08 | |||||
Convertible Debt | ||||||
Liability component: | ||||||
Principal | $ 2,837,800,000 | $ 2,837,800,000 | ||||
Unamortized debt discount and debt issuance costs | (21,200,000) | (26,200,000) | ||||
Net carrying amount of the liability component | 2,816,600,000 | 2,811,600,000 | ||||
Convertible Debt | 2024 Notes | ||||||
Liability component: | ||||||
Principal | $ 125,000,000 | $ 450,000,000 | 323,100,000 | 323,100,000 | ||
Unamortized debt discount and debt issuance costs | (7,400,000) | (11,500,000) | ||||
Net carrying amount of the liability component | $ 315,700,000 | 311,600,000 | ||||
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 | day | 20 | |||||
Conversion threshold consecutive trading days (in days) | 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 debt issuance costs | $ (315,200,000) | (3,800,000) | (4,100,000) | |||
Net carrying amount of the liability component | $ 1,046,200,000 | 1,045,900,000 | ||||
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 | day | 20 | |||||
Conversion threshold consecutive trading days (in days) | day | 30 | 30 | ||||
Convertible Debt | 2028 Notes | ||||||
Liability component: | ||||||
Principal | $ 861,000,000 | $ 861,000,000 | 861,000,000 | |||
Unamortized debt discount and debt issuance costs | $ (231,200,000) | (5,100,000) | (5,500,000) | |||
Net carrying amount of the liability component | $ 855,900,000 | 855,500,000 | ||||
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 | day | 20 | 20 | ||||
Conversion threshold consecutive trading days (in days) | day | 30 | 30 | ||||
Convertible Debt | 2029 Notes | ||||||
Liability component: | ||||||
Principal | $ 603,700,000 | $ 603,700,000 | 603,700,000 | |||
Unamortized debt discount and debt issuance costs | (4,900,000) | (5,100,000) | ||||
Net carrying amount of the liability component | $ 598,800,000 | $ 598,600,000 | ||||
Sale price of common stock (in usd per share) | $ / shares | $ 90.40 | |||||
Conversion threshold percentage of stock price trigger (as a percent) | 130% | 130% | ||||
Conversion price (in usd per share) | $ / shares | $ 69.54 | $ 69.54 | ||||
Number of days to trigger conversion | day | 20 | 20 | ||||
Conversion threshold consecutive trading days (in days) | day | 30 | 30 |
Debt - Interest Expense Related
Debt - Interest Expense Related to Convertible Notes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Debt Instrument | ||
Amortization of the debt discount and debt issuance costs | $ 4.9 | $ 5.7 |
Convertible Debt | ||
Debt Instrument | ||
Contractual interest expense | 4.8 | 2.7 |
Amortization of the debt discount and debt issuance costs | 4.9 | 5.7 |
Total interest expense | $ 9.7 | $ 8.4 |
Debt - Future Interest and Prin
Debt - Future Interest and Principal Payments (Details) - Convertible Debt $ in Millions | Sep. 30, 2023 USD ($) |
Debt Instrument | |
2024 | $ 342.4 |
2025 | 18.7 |
2026 | 18.7 |
2027 | 1,065.9 |
2028 | 874.4 |
Thereafter | 617.1 |
Total payments | 2,937.2 |
2024 Notes | |
Debt Instrument | |
2024 | 323.7 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
2028 | 0 |
Thereafter | 0 |
Total payments | 323.7 |
2026 Notes | |
Debt Instrument | |
2024 | 5.3 |
2025 | 5.3 |
2026 | 5.3 |
2027 | 1,052.5 |
2028 | 0 |
Thereafter | 0 |
Total payments | 1,068.4 |
2028 Notes | |
Debt Instrument | |
2024 | 4.3 |
2025 | 4.3 |
2026 | 4.3 |
2027 | 4.3 |
2028 | 865.3 |
Thereafter | 0 |
Total payments | 882.5 |
2029 Notes | |
Debt Instrument | |
2024 | 9.1 |
2025 | 9.1 |
2026 | 9.1 |
2027 | 9.1 |
2028 | 9.1 |
Thereafter | 617.1 |
Total payments | $ 662.6 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Changes in accumulated other comprehensive income (loss) by component | ||
Balance at the beginning of the period | $ 1,355.8 | $ 1,875 |
Other comprehensive gain (loss), net | 1.1 | (0.6) |
Balance at the end of the period | 1,310.8 | 1,526.4 |
Total | ||
Changes in accumulated other comprehensive income (loss) by component | ||
Balance at the beginning of the period | 4.1 | 0.4 |
Other comprehensive gain (loss), net | 1.1 | (0.6) |
Balance at the end of the period | 5.2 | (0.2) |
Foreign Currency Translation Adjustments, Net Of Tax | ||
Changes in accumulated other comprehensive income (loss) by component | ||
Balance at the beginning of the period | 10.4 | 9.7 |
Other comprehensive gain (loss), net | (0.2) | 0 |
Balance at the end of the period | 10.2 | 9.7 |
Defined Benefit Obligations, Net Of Tax | ||
Changes in accumulated other comprehensive income (loss) by component | ||
Balance at the beginning of the period | (0.4) | 1 |
Other comprehensive gain (loss), net | 0 | 0 |
Balance at the end of the period | (0.4) | 1 |
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 | (5.9) | (10.3) |
Other comprehensive gain (loss), net | 1.3 | (0.6) |
Balance at the end of the period | $ (4.6) | $ (10.9) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) -Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Equity [Abstract] | ||
Other comprehensive loss | $ (1.1) | $ 0.6 |
Unrealized loss on available-for-sale securities is presented net of tax | $ 0.4 | $ 0.2 |
Restructuring and Related Cha_3
Restructuring and Related Charges - Summary of Activity of Restructuring and Related Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Summary of Restructuring Activity and Related Charges | ||
Balance as of beginning of period | $ 5 | $ 0 |
Charges | 11 | 9.3 |
Payments | (6.7) | (6.2) |
Balance as of end of period | $ 9.3 | $ 3.1 |
Restructuring and Related Cha_4
Restructuring and Related Charges - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Restructuring and Related Activities [Abstract] | ||
Charges | $ 11 | $ 9.3 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax (benefit) provision | $ (1.4) | $ 19.2 |
Discrete tax expense related to stock based compensation | 1.8 | |
Discrete tax expense related to international restructuring | $ 13.1 | |
Unrecognized tax benefit that would impact tax rate if recognized | 59.5 | |
Unrecognized tax benefit reasonably expected to decrease over next 12 months | $ 1.9 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Nov. 06, 2022 | Aug. 03, 2022 | Jul. 03, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | Jul. 01, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Shares of common stock available for grant (in shares) | 400,000 | 2,700,000 | ||||
Stock-based compensation expense | $ 32.1 | $ 46.6 | ||||
Stock-based compensation capitalized to inventory | 16.9 | $ 14.2 | ||||
NeoPhotonics | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Stock-based compensation expense | $ 11.9 | |||||
Expenses recognized | $ 9 | |||||
Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Stock units granted (in shares) | 1,700,000 | |||||
Granted (in usd per share) | $ 52.9 | |||||
Stock-based compensation cost related to awards granted to employees | $ 219.3 | |||||
Estimated amortization period (in years) | 2 years 3 months 18 days | |||||
Performance Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Stock units granted (in shares) | 700,000 | |||||
Granted (in usd per share) | $ 53.3 | |||||
Stock-based compensation expense | $ 4.7 | 8.8 | ||||
2015 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Authorized (in shares) | 900,000 | |||||
2015 Plan | Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Shares outstanding (in shares) | 4,600,000 | |||||
Vesting period (in years) | 3 years | |||||
2015 Plan | Performance Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting period (in years) | 3 years | |||||
Fair value | $ 40.2 | |||||
2015 Plan | Performance Stock Units | Non Executive Employee Member | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting period (in years) | 1 year | |||||
Stock units granted (in shares) | 300,000 | |||||
Fair value | $ 16 | |||||
2015 Plan | Performance Stock Units | Employee | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Fair value | $ 3.5 | |||||
2015 Plan | Performance Stock Units | Director | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Vesting period (in years) | 3 years | |||||
Stock units granted (in shares) | 400,000 | |||||
Fair value | $ 19.3 | |||||
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 | |||||
2015 Purchase Plan | Employee Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Shares of common stock available for grant (in shares) | 1,100,000 | |||||
Discount rate provided under purchase plan (as a percent) | 15% | |||||
Look-back period (in months) | 6 months | |||||
Common stock authorized for issuance under plan (in shares) | 3,000,000 | |||||
Stock-based compensation expense | $ 1.2 | $ 1.2 | ||||
Replacement Award | Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Stock units granted (in shares) | 400,000 | |||||
Granted (in usd per share) | $ 93.4 |
Equity - Stock-Based Compensati
Equity - Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||
Stock-based compensation expense | $ 32.1 | $ 46.6 |
Cost of sales | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||
Stock-based compensation expense | 6 | 5.5 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||
Stock-based compensation expense | 10.3 | 9.6 |
Selling, general and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount | ||
Stock-based compensation expense | $ 15.8 | $ 31.5 |
Equity - Schedule of Income Tax
Equity - Schedule of Income Tax Benefit Associated with Stock-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Equity [Abstract] | ||
Income tax benefit associated with stock-based compensation | $ 1.9 | $ 5.1 |
Equity - Stock Award Activity (
Equity - Stock Award Activity (Details) shares in Millions | 3 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Restricted Stock Units | |
Number of Shares | |
Balance at beginning of period (in shares) | shares | 2.6 |
Granted (in shares) | shares | 1.7 |
Vested (in shares) | shares | (0.7) |
Canceled (in shares) | shares | (0.1) |
Balance at end of period (in shares) | shares | 3.5 |
Weighted-Average Grant Date Fair Value per Share | |
Balance at beginning of period (in usd per share) | $ / shares | $ 85 |
Granted (in usd per share) | $ / shares | 52.9 |
Vested (in usd per share) | $ / shares | 88.9 |
Canceled (in usd per share) | $ / shares | 81.2 |
Balance at end of period (in usd per share) | $ / shares | $ 68 |
Performance Stock Units | |
Number of Shares | |
Balance at beginning of period (in shares) | shares | 0.6 |
Granted (in shares) | shares | 0.7 |
Vested (in shares) | shares | (0.2) |
Canceled (in shares) | shares | 0 |
Balance at end of period (in shares) | shares | 1.1 |
Weighted-Average Grant Date Fair Value per Share | |
Balance at beginning of period (in usd per share) | $ / shares | $ 89.1 |
Granted (in usd per share) | $ / shares | 53.3 |
Vested (in usd per share) | $ / shares | 89.5 |
Canceled (in usd per share) | $ / shares | 90.1 |
Balance at end of period (in usd per share) | $ / shares | $ 65.9 |
Equity - Awards Available for G
Equity - Awards Available for Grant (Details) shares in Millions | 3 Months Ended |
Sep. 30, 2023 shares | |
Awards Available for Grant | |
Balance as of beginning of period (in shares) | 2.7 |
Granted (in shares) | (2.4) |
Canceled (in shares) | 0.1 |
Balance as of end of period (in shares) | 0.4 |
Equity - Employee Stock Purchas
Equity - Employee Stock Purchase Plan Activity Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Stock-based compensation expense | $ 32.1 | $ 46.6 |
2015 Purchase Plan | Employee Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Stock-based compensation expense | $ 1.2 | $ 1.2 |
Shares issued to employees (in shares) | 0 | 0 |
Equity - Repurchase and Retirem
Equity - Repurchase and Retirement of Common Stock Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 29 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | Sep. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Repurchase of common stock | $ 0 | $ 35.8 | |
Share Buyback Program | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Shares authorized for repurchase (up to) | 1,200 | $ 1,200 | |
Repurchases of common stock (in shares) | 0.3 | 7.7 | |
Average cost per share (in dollars per share) | $ 89.80 | $ 81.66 | |
Repurchase of common stock | $ 25.7 | $ 630.4 | |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 569.6 | $ 569.6 |
Commitments and Contingencies -
Commitments and Contingencies - Purchase Obligations (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Legally-binding purchase commitment obligations | $ 395 |
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) | 3 Months Ended |
Sep. 30, 2023 | |
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 | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Changes in warranty reserve | ||
Balance as of beginning of period | $ 6.8 | $ 10 |
Warranties assumed in NeoPhotonics merger | 0 | 0.7 |
Provision for warranty | 0.2 | 1.5 |
Utilization of reserve | (1.5) | (2.1) |
Balance as of end of period | $ 5.5 | $ 10.1 |
Commitments and Contingencies_4
Commitments and Contingencies - Litigation (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 lawsuit | Jul. 01, 2023 USD ($) | |
Business Acquisition | ||
Accrual for legal expenses | $ | $ 7.8 | |
Oclaro | ||
Business Acquisition | ||
Number of lawsuits filed | 7 | |
Number of pending claims | 1 |
Operating Segments and Geogra_3
Operating Segments and Geographic Information - Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2023 USD ($) region segment customer vendor | Oct. 01, 2022 USD ($) customer vendor | Jul. 01, 2023 customer | |
Concentration Risk | |||
Number of reportable segments | segment | 2 | ||
Number of operating segments | segment | 2 | ||
Interest and investment income | $ 21.7 | $ 4.8 | |
Number of geographic regions | region | 3 | ||
Corporate, Non-Segment | |||
Concentration Risk | |||
Charges to acquire components | $ 2.9 | 7.3 | |
Legal and professional fees | 3.3 | ||
Employee benefit related costs | 1.2 | ||
Interest and investment income | 21.7 | 4.8 | |
Net foreign exchange gains (losses) | $ 0.5 | $ 9 | |
Customer Concentration Risk | Inventory Purchases | One Vendors | |||
Concentration Risk | |||
Concentration risk (as a percent) | 45% | ||
Number of vendors | vendor | 1 | ||
Customer Concentration Risk | Inventory Purchases | Two Vendors | |||
Concentration Risk | |||
Concentration risk (as a percent) | 51% | ||
Number of vendors | vendor | 2 | ||
Customer Concentration Risk | Three Customers | Revenue | |||
Concentration Risk | |||
Number of customers | customer | 3 | ||
Customer Concentration Risk | Three Customers | Accounts Receivable | |||
Concentration Risk | |||
Number of customers | customer | 3 | ||
Customer Concentration Risk | Two Customers | Revenue | |||
Concentration Risk | |||
Number of customers | customer | 2 | ||
Customer Concentration Risk | Two Customers | Accounts Receivable | |||
Concentration Risk | |||
Number of customers | customer | 2 | ||
Customer Concentration Risk | Customer One | Revenue | |||
Concentration Risk | |||
Concentration risk (as a percent) | 15% | 17% | |
Customer Concentration Risk | Customer One | Accounts Receivable | |||
Concentration Risk | |||
Concentration risk (as a percent) | 12% | 14% | |
Customer Concentration Risk | Customer Two | Revenue | |||
Concentration Risk | |||
Concentration risk (as a percent) | 13% | 17% | |
Customer Concentration Risk | Customer Two | Accounts Receivable | |||
Concentration Risk | |||
Concentration risk (as a percent) | 11% | 12% | |
Customer Concentration Risk | Customer Three | Revenue | |||
Concentration Risk | |||
Concentration risk (as a percent) | 10% | ||
Customer Concentration Risk | Customer Three | Accounts Receivable | |||
Concentration Risk | |||
Concentration risk (as a percent) | 12% |
Operating Segments and Geogra_4
Operating Segments and Geographic Information - Schedule of Information on Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Information on reportable segments | ||
Net revenue | $ 317.6 | $ 506.8 |
Total segment profit | 76.7 | 201.2 |
Stock-based compensation | (32.1) | (46.6) |
Amortization of acquired intangibles | (29) | (32.2) |
Restructuring and related charges | (11) | (9.3) |
Interest expense | (9.7) | (8.5) |
Other income, net | 21.2 | 13.8 |
Consolidated income (loss) before income taxes | (69.3) | 18.8 |
Cloud & Networking | ||
Information on reportable segments | ||
Net revenue | 229.7 | 360.1 |
Industrial Tech | ||
Information on reportable segments | ||
Net revenue | 87.9 | 146.7 |
Operating Segments | ||
Information on reportable segments | ||
Net revenue | 317.6 | 506.8 |
Total segment profit | 39.2 | 170.5 |
Operating Segments | Cloud & Networking | ||
Information on reportable segments | ||
Net revenue | 229.7 | 360.1 |
Total segment profit | 23.9 | 101.7 |
Operating Segments | Industrial Tech | ||
Information on reportable segments | ||
Net revenue | 87.9 | 146.7 |
Total segment profit | 15.3 | 68.8 |
Corporate, Non-Segment | ||
Information on reportable segments | ||
Selling, general and administrative (1) | (28.6) | (33.1) |
Stock-based compensation | (32.1) | (34.7) |
Stock-based compensation - acquisition related | 0 | (11.9) |
Amortization of acquired intangibles | (29) | (32.2) |
Amortization of acquired inventory fair value adjustments | 0 | (4.6) |
Acquisition related costs | (4) | (16.2) |
Integration related costs | (11.3) | (0.6) |
Restructuring and related charges | (11) | (9.3) |
Other charges, net | (4) | (14.4) |
Interest expense | (9.7) | (8.5) |
Other income, net | 21.2 | 13.8 |
Consolidated income (loss) before income taxes | $ (69.3) | $ 18.8 |
Operating Segments and Geogra_5
Operating Segments and Geographic Information - Schedule of Revenue by Geographic Region (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Net revenue and identifiable assets by geographic regions | ||
Amount | $ 317.6 | $ 506.8 |
Americas: | Geographic Concentration Risk | Total Net Revenue | ||
Net revenue and identifiable assets by geographic regions | ||
Amount | $ 66 | $ 122 |
Concentration risk (as a percent) | 20.80% | 24.10% |
United States | Geographic Concentration Risk | Total Net Revenue | ||
Net revenue and identifiable assets by geographic regions | ||
Amount | $ 41.1 | $ 62.2 |
Concentration risk (as a percent) | 12.90% | 12.30% |
Mexico | Geographic Concentration Risk | Total Net Revenue | ||
Net revenue and identifiable assets by geographic regions | ||
Amount | $ 23.7 | $ 57.5 |
Concentration risk (as a percent) | 7.50% | 11.30% |
Other Americas | Geographic Concentration Risk | Total Net Revenue | ||
Net revenue and identifiable assets by geographic regions | ||
Amount | $ 1.2 | $ 2.3 |
Concentration risk (as a percent) | 0.40% | 0.50% |
Asia-Pacific: | Geographic Concentration Risk | Total Net Revenue | ||
Net revenue and identifiable assets by geographic regions | ||
Amount | $ 219 | $ 336.5 |
Concentration risk (as a percent) | 68.90% | 66.40% |
Hong Kong | Geographic Concentration Risk | Total Net Revenue | ||
Net revenue and identifiable assets by geographic regions | ||
Amount | $ 64.9 | $ 77.6 |
Concentration risk (as a percent) | 20.40% | 15.30% |
South Korea | Geographic Concentration Risk | Total Net Revenue | ||
Net revenue and identifiable assets by geographic regions | ||
Amount | $ 25 | $ 67.7 |
Concentration risk (as a percent) | 7.90% | 13.40% |
Thailand | Geographic Concentration Risk | Total Net Revenue | ||
Net revenue and identifiable assets by geographic regions | ||
Amount | $ 64.2 | $ 57.5 |
Concentration risk (as a percent) | 20.20% | 11.30% |
Other Asia-Pacific | Geographic Concentration Risk | Total Net Revenue | ||
Net revenue and identifiable assets by geographic regions | ||
Amount | $ 64.9 | $ 133.7 |
Concentration risk (as a percent) | 20.40% | 26.40% |
EMEA | Geographic Concentration Risk | Total Net Revenue | ||
Net revenue and identifiable assets by geographic regions | ||
Amount | $ 32.6 | $ 48.3 |
Concentration risk (as a percent) | 10.30% | 9.50% |
Operating Segments and Geogra_6
Operating Segments and Geographic Information - Schedule of Long-lived Assets by Geographic Region (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jul. 01, 2023 |
Property, plant and equipment, net | ||
Total property, plant and equipment, net | $ 511.6 | $ 489.5 |
United States | ||
Property, plant and equipment, net | ||
Total property, plant and equipment, net | 137.3 | 134.7 |
Thailand | ||
Property, plant and equipment, net | ||
Total property, plant and equipment, net | 131.7 | 132 |
Japan | ||
Property, plant and equipment, net | ||
Total property, plant and equipment, net | 87.3 | 93 |
United Kingdom | ||
Property, plant and equipment, net | ||
Total property, plant and equipment, net | 66.3 | 38.2 |
China | ||
Property, plant and equipment, net | ||
Total property, plant and equipment, net | 38.5 | 42.1 |
Other countries | ||
Property, plant and equipment, net | ||
Total property, plant and equipment, net | $ 50.5 | $ 49.5 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) | 3 Months Ended |
Sep. 30, 2023 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 | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Concentration Risk | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 317.6 | $ 506.8 |
Cloud & Networking | ||
Concentration Risk | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 229.7 | $ 360.1 |
Cloud & Networking | Revenue | Product Offerings | ||
Concentration Risk | ||
Concentration risk (as a percent) | 72.30% | 71.10% |
Industrial Tech | ||
Concentration Risk | ||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 87.9 | $ 146.7 |
Industrial Tech | Revenue | Product Offerings | ||
Concentration Risk | ||
Concentration risk (as a percent) | 27.70% | 28.90% |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Contract Balances (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2023 USD ($) | |
Accounts receivable, net | |
Accounts receivable, net, beginning balance | $ 246.1 |
Accounts receivable, net, change | (26.1) |
Accounts receivable, net, ending balance | $ 220 |
Accounts receivable, net, percentage change (as a percent) | (10.60%) |
Deferred revenue and customer deposits | |
Deferred revenue and customer deposits, beginning balance | $ 2.1 |
Deferred revenue and customer deposits, change | (0.5) |
Deferred revenue and customer deposits, ending balance | $ 1.6 |
Deferred revenue and customer deposits, percentage change (as a percent) | (23.80%) |
Subsequent Event - (Details)
Subsequent Event - (Details) - Cloud Light Technology Limited - USD ($) $ in Millions | 3 Months Ended | |
Nov. 07, 2023 | Sep. 30, 2023 | |
Subsequent Event | ||
Transaction cost | $ 3.7 | |
Subsequent Event | ||
Subsequent Event | ||
Total purchase price consideration | $ 750 | |
Cash consideration | $ 706.6 |
Uncategorized Items - lite-2023
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2020-06 [Member] |