Infinera was an optical systems manufacturer with revenue of about $1.4 billion at the time of purchase and a loss-making bottom line.
Lumentum is a component supplier with revenue of $3.0 billion in the last fiscal year and an adjusted operating margin of 29.8%, meaning that in our view it is a clearly more profitable and higher-quality target.
I’d like to comment on this part, given that the optical playing field is changing at such a breakneck pace.
In my opinion, Infinera has also always emphasized its own component-level production and the possibility of selling just that. Just like Nokia has the same option, for example with ICE-D.
However, those revenues and operating profits aren’t really comparable right now—things change fast.
In 2025 (July 2024–June 2025), Lumentum’s revenue was 1.65 B and operating profit was 0.1601 B… so the EBIT margin is 9.7%—this is comparable operating profit, with the reported figure at -0.178 B. And in the preceding fiscal year, Lumentum was very deeply in the red. And in my view, that fiscal year aligns best for an Infinera comparison.
Now there is an opportunity to generate earnings, unlike a couple of years ago. In my opinion, the quality is exactly the same, even though they are slightly different types of companies.