EARNINGS PANEL: CRWV, SMCI, LITE

**Marley Kayden** (0:00)
All right, we've got earnings here from Lumentum just coming across the wire right now. So let's get to these. We'll start with the revenue numbers. It's their fiscal fourth quarter. Revenue coming in at 1.01 billion.
The estimate is looking for 990, so better than expected. They're also up more than double from the 480.7 million in the year ago quarter. Components and parts revenue coming in at 649.4 million.
High, better than the year ago quarter, also better than the expectation, looking for 636.9. Systems revenue coming in at 356.9 million, that's also better than the expectation, looking for about 350 Gross margins coming in about 47.4 percent. Street was looking for 44.3, also a significant improvement over the 33 percent from the year ago period here. Now, as we look ahead to some of their projections here, they are projecting for their first quarter, revenue of $1.225 to $1.275 billion. That's well above the consensus, looking for $1.15, and it shows continued growth from this quarter they just reported. Their operating margins are guided to be between 39.5 and 40.5 here. Non-GAAP diluted EPS expected to come in at $4.05 between 4 and 4.35. Prior consensus was about 358 here, as we look across these numbers. They've more than doubled their revenue year over year. They've come in well above the expectations in terms of their guidance here. Their EPS coming in at $3.23, better than the 297 to 299 that the street was looking for here, and yet we are seeing about a percent and a half move to the downside. So Alex, what are you seeing here in Lumentum that the street is digesting right now and leading us to move negative?

**Alex Coffey** (1:50)
Yeah. Well, let's start with what we know in the numbers. The numbers are really, really positive, as was expected. You're not going to poke apart this story. But the question I asked as we were about to break the numbers is, what is the positive surprise? I had a guest on NextGen today, Corey Johnson, and we discussed Lumentum, and every single thing Corey said was extremely optimistic about the company. But when pressed about the stock, it's, well, I don't know how the stock's going to perform because what's going to be good enough? I'm a firm believer in two things when it comes to financial markets. One, that's surprise is what moves markets, and ultimately, the reason technical analysis works, if it does, and there's so many followers of it, is that it's about pattern recognition. Well, the pattern right now is that there's nothing these companies can say that is really being enough for the market. And it's because, I mean, the analyst, 27 buys, 4 holds, sells, is what it says, based on Bloomberg's, basically, compilation of this.
The entire street anticipates this. So if we're all expecting really strong numbers, there's not really room for me to be surprised to the upside. Now, they could have, but you have this other side of the equation, which is, they have supply chain issues to actually meet the end market demand. So it kind of limits that right tail, that positive surprise at the upside. And so right around now in earnings, when it comes to these AI infrastructure names, there's a lot of asymmetric risk to the downside, and we've seen that in the reactions.

**Marley Kayden** (3:23)
Yeah. And right now, we're down about 2 percent for Lumentum, but I want to switch over to Super Micro. I highlighted them yesterday with Sam as potentially one of the more interesting earnings reports because they had already gotten out in front of a potentially lower than expected revenue number here. So let's take a look at these numbers here. We are moving to the upside 10 percent already on their fiscal fourth quarter numbers. EPS coming in at $1.70. The expectation was for $1.59, so we've got a beat there. Net sales coming in at $11.12 billion. Now, that is below the $11.26 billion the street was looking for, but it is on the lower end of their guidance range, which was $11 to $12.5 billion that they said they would be in. So they are in range. Margins, though, this is where it really mattered. They doubled their margin projections, saying it would come in between 15 and 17%.
They are coming in above that at 17.6% for their adjusted gross margins for the fourth quarter. So that was really going to be the story here. Net income coming in at $1.18 billion as well. As we look across their first quarter and full year outlooks, they are guiding for first quarter EPS of 101 to $1.10. That is well above the consensus, looking for 74 to 76 cents. Their net sales guidance for the first quarter, looking for $14.5 to $15.5 billion.