Lumentum Holdings Inc (LITE)
Profitability ratios
Return on sales
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 27.96% | 22.56% | 17.76% | 17.44% | 18.92% | 22.13% | 28.08% | 30.50% | 33.26% | 37.39% | 39.14% | 42.78% | 46.05% | 45.74% | 46.14% | 46.56% | 44.93% | 43.98% | 42.81% | 40.94% |
| Operating profit margin | -10.95% | -18.20% | -24.39% | -28.91% | -29.20% | -25.08% | -19.48% | -11.60% | -4.22% | 0.18% | 4.83% | 10.25% | 15.76% | 17.46% | 30.10% | 31.28% | 30.24% | 29.57% | 16.67% | 14.47% |
| Pretax margin | -10.46% | -19.57% | -25.21% | -30.15% | -29.85% | -22.76% | -18.41% | -12.07% | -5.80% | -1.09% | 3.17% | 8.71% | 13.73% | 13.46% | 26.37% | 27.55% | 26.57% | 26.13% | 14.39% | 12.16% |
| Net profit margin | 1.57% | -29.87% | -36.98% | -40.70% | -40.21% | -24.91% | -18.52% | -12.62% | -7.45% | -2.02% | 1.56% | 6.61% | 11.61% | 11.04% | 22.57% | 23.68% | 22.80% | 21.60% | 11.11% | 9.22% |
The analysis of Lumentum Holdings Inc.'s profitability ratios over the observed periods reveals a notable trend of declining margins across all metrics since their peaks around the March to June 2021 timeframe.
Gross Profit Margin:
Initially, the gross profit margin demonstrated a consistent upward trajectory from 40.94% as of September 30, 2020, reaching a peak of 46.56% by September 30, 2021. Subsequently, it exhibited a steady decline, falling below 40% after December 2021. By December 31, 2023, it had decreased to 28.08%, with further erosion evident through 2024 and into mid-2025, where margins reached as low as 17.44%. The slight recovery to 27.96% by June 30, 2025, suggests some stabilization but remains significantly below peak levels, indicating a compression in gross profitability.
Operating Profit Margin:
The operating profit margin followed a similar pattern, peaking at 31.28% on September 30, 2021. After this peak, the margin declined sharply, turning negative as early as March 2023, with a sustained negative trend through June 2025. This persistent operating margin deterioration indicates increased operational costs or declining operational efficiencies, culminating in operating losses during the recent periods.
Pretax Margin:
Pre-tax margins mirrored the decline observed in gross and operating margins. The margin was relatively healthy at 27.55% on September 30, 2021, but diminished significantly post-2021, turning negative by March 2023 and worsening thereafter. The continued negative pretax margins through June 2025, with a partial improvement (to -10.46%) at mid-2025, reflect ongoing challenges in pre-tax profitability.
Net Profit Margin:
Net profit margins also peaked around September 2021 at 23.68%. Since then, a downward trend resulted in losses, with the most recent data indicating a marginal positive return of 1.57% on June 30, 2025. Prior to this, the margins experienced drastic declines, with losses reaching as high as -40.70% in September 2024, and remaining negative through the last observed period.
Summary:
Overall, Lumentum’s profitability ratios reveal a marked deterioration from 2021 onward. The peak profitability levels seen in early 2021 have gradually eroded, leading to substantial declines in gross, operating, pretax, and net margins. The company faced increased operational and pre-tax challenges, culminating in negative operating and net profitability in recent periods. The slight margin recovery towards mid-2025 may indicate emerging operational improvements or strategic adjustments, but the overall trend underscores a period of diminished profitability and significant margin compression over the analyzed years.
Return on investment
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -4.27% | -6.74% | -8.70% | -10.04% | -10.09% | -8.48% | -6.02% | -4.03% | -1.61% | 0.08% | 2.00% | 4.14% | 6.48% | 7.11% | 14.21% | 15.46% | 14.84% | 13.57% | 8.18% | 7.18% |
| Return on assets (ROA) | 0.61% | -11.07% | -13.18% | -14.13% | -13.90% | -8.42% | -5.72% | -4.38% | -2.84% | -0.84% | 0.65% | 2.67% | 4.78% | 4.49% | 10.65% | 11.70% | 11.19% | 9.91% | 5.45% | 4.58% |
| Return on total capital | -13.21% | -30.24% | -37.93% | -43.09% | -38.85% | -24.29% | -17.66% | -11.60% | -4.81% | 2.24% | 7.88% | 14.81% | 16.82% | 15.60% | 25.64% | 27.73% | 26.86% | 23.73% | 16.06% | 14.62% |
| Return on equity (ROE) | 2.28% | -50.02% | -59.93% | -62.62% | -57.09% | -30.10% | -20.86% | -15.19% | -9.71% | -2.39% | 1.85% | 7.67% | 10.61% | 9.71% | 19.05% | 20.88% | 20.14% | 17.15% | 9.84% | 8.53% |
The analysis of Lumentum Holdings Inc.’s profitability ratios over the period covered indicates a significant deterioration in profitability metrics from 2020 through mid-2025.
Starting with the Operating Return on Assets (Operating ROA), the company demonstrated a steady improvement from 7.18% on September 30, 2020, reaching a peak of 15.46% on September 30, 2021. This upward trend suggests enhanced operational efficiency and profit generation relative to asset base during this period. However, from late 2021 onward, a pronounced decline emerged, culminating in negative territory by September 30, 2024, at -10.04%, and continuing into March 2025 with -6.74%. This indicates that operations have become increasingly unprofitable on an operating basis, likely reflecting operational challenges or market headwinds adversely affecting core activities.
Similarly, the Return on Assets (ROA), which captures net income relative to total assets, experienced a comparable decline. After reaching approximately 11.70% on September 30, 2021, the ratio steadily declined, turning negative in March 2023 (-0.84%) and deepening through 2024 and into 2025, reaching -11.07% in the latest quarter. This trend underscores increasing net losses relative to the total asset base, highlighting ongoing difficulties in sustaining profitable asset utilization.
Return on Total Capital (ROTC) also revealed a stark downturn. It showed a robust 27.73% on September 30, 2021, but subsequently declined sharply. By the end of 2023, ROTC was negative at -17.66%, with further declines in 2024 and mid-2025, reaching -13.21%. The precipitous fall signifies a diminishing capacity to generate returns from all invested capital, often associated with declining operating performance and deteriorating net income figures.
ROE (Return on Equity) exhibited an even more pronounced negative trajectory after mid-2021. It peaked at 20.88% in September 2021 but subsequently declined sharply, turning negative in 2023 and reaching as low as -62.62% in September 2024. The latest data shows some improvement, with ROE standing at 2.28% as of June 2025, but remains well below historical highs and indicates that the company has been facing significant challenges in delivering shareholder value.
In summary, Lumentum’s profitability ratios highlight a consistent downturn from mid-2021 onwards. The initial improvements in 2020-2021 were followed by steep declines in subsequent years, transitioning to negative profitability metrics across all ratios by late 2022 through 2024. This pattern reflects a period of substantial operational and financial distress, with the company’s ability to generate profits and returns on assets, capital, and equity severely impacted, although a recent modest recovery appears to be emerging.