Advanced Talks to Buy Lumentum Put 109.3% Revenue Growth in Focus
Key Facts
Marvell is in advanced talks to acquire Lumentum, Reuters reported, citing a Bloomberg report based on people familiar with the matter. The report puts the potential transfer of an optical communications components specialist to Marvell in focus as Lumentum records strong revenue growth. MarketWatch said an agreement between the companies could be reached in the week following the October 28 report. The reports included no details on the deal's value or terms, and neither company has announced an agreement. The reports describe talks attributed to informed sources, not a completed or announced deal.
The potential talks come after a rapid expansion in Lumentum's business: revenue reached $1,006.3 million in the fourth quarter of its fiscal 2026, ended June 27. Revenue rose 24.5% from the third quarter, when it was $808.4 million, and increased 109.3% from $480.7 million in the year-earlier period. For fiscal 2026, the company recorded revenue of $3,014.0 million, up 83.2% from $1,645.0 million in fiscal 2025. These results provide financial context for discussion of the company, but do not establish the reason for the talks or either party's motives. The available sources did not announce terms linking Lumentum's growth to the talks.
In its latest financial guidance, Lumentum forecast revenue of between $1.225 billion and $1.275 billion for the first quarter of fiscal 2027. It also set an operating margin, on its non-GAAP measure, of between 39.5% and 40.5%. Chief Executive Michael Hurlston said AI demand lifted the midpoint of the revenue forecast to $1.25 billion. He added that the company was reaching its target model more than one fiscal quarter ahead of schedule. The remarks link management's outlook to demand for its products, without offering a public explanation for the acquisition talks.
Lumentum also highlighted indicators of demand for optical interconnect technologies inside data centers. It said rising demand for high-power CPO lasers, an initial order for ELS modules and expanding NPO engagements were “the first signs that optics are starting to enter connectivity within the racks.” In its shareholder letter, the company said its optical circuit switching (OCS) platform had surpassed a quarterly revenue run rate of $100 million, and that it expects the category to generate billions of dollars in revenue in coming years. It also said shipments of high-speed transceivers, transport products and laser chips reached record levels, and that it had begun production of next-generation 1.6T modules. These products provide commercial context for Lumentum's optics business, while the sources do not say that this context prompted the talks.
EL7 data show Lumentum closing at $866.18 and Marvell at $243.57 in the October 27 session, before the talks report published the following day. The shares had closed at $818.1 and $233.78, respectively, on October 26. These prices compare two sessions before the report and do not measure the market's response to it. The available EL7 data did not include closing prices after publication, so the figures do not describe subsequent share moves. Lumentum's next announced results date is November 5, 2026, after the market close, with the company scheduled to hold an audio webcast the same day at 5:00 p.m. Eastern Time.