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May 9, 2024

VIA EDGAR SUBMISSION

Securities and Exchange Commission

Division of Corporation Finance

Office of Manufacturing

100 F Street, N.E.

Washington, D.C. 20549

Attn. Mindy Hooker and Anne McConnell

Re: Lumentum Holdings Inc.

Form 10-K for the fiscal year ended July 1, 2023

Form 8-K filed on August 17, 2023

File No. 1-36861

Ladies and Gentlemen,

Lumentum Holdings Inc. (“Lumentum” or the “Company”) submits this letter in response to the comments contained in the correspondence of the Staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “Commission”), dated April 11, 2024 (the “Comment Letter”), relating to the Form 10-K for the fiscal year ended July 1, 2023 (the “Form 10-K”) and Form 8-K filed on August 17, 2023 (the “Form 8-K").

For reference purposes, the text of the comments in the Comment Letter have been reproduced herein (in bold), with the Company’s response below each numbered comment.

Form 8-K filed August 17, 2023

Exhibit 99.1

1.We have read your response to prior comment 9 in our letter dated March 1, 2024 and note the following:

Lumentum respectfully acknowledges the Staff’s comment regarding our current presentation of non-GAAP financial measures in our Form 8-K.  We would like to provide additional information on each of the Staff’s supplemental points separately below.

•The non-GAAP adjustments for incremental cost of sales related to components previously acquired from various brokers to satisfy customer demand are inventory costs you incurred to retain key customers who will continue to impact operating results.

With respect to incremental cost of sales related to components previously acquired from various brokers to satisfy customer demand, we would like to clarify that we have fixed pricing with our regular component suppliers.  Therefore, when we experienced severe supply constraints, we incurred these extraordinary costs related to the acquisition of parts from the secondary market that were short term in nature, and not representative of the normal costs of our ongoing business or historical price fluctuations. There was no incremental revenue as we also have fixed pricing with our customers. Question 100.01 references “normal, recurring” costs “necessary to operate a registrants business,” and given our historical experience, we do not believe that these incremental costs, which represented the amounts above the contractual costs we would have otherwise paid, even taking into account price fluctuations, were normal or recurring, and they will not continue in the future.

The constraints we experienced on our supply chain were unprecedented.  We had to access the secondary market in order to secure component supply.  These purchases on the secondary market through brokers were not made up of relatively modest increases, but rather many multiples of the price charged by the customary supplier of the product. For example, there were parts that normally cost ~$10 from our primary supplier which we paid $300 or more on the secondary market during this period.  We expected to continue to purchase the same components for ~$10 per part from our primary supplier once the supply chain normalized.  Now that supply chain has normalized, we are in fact purchasing these same components for the previous price of ~$10 per part.  In this example, we excluded the incremental amount from our non-GAAP financial measures.  The prices charged by brokers during this time period were not the typical pricing variances we have experienced from our regular suppliers, especially given the nature of our fixed price contracts.   The exorbitant prices and need to purchase from the secondary market were short term in nature and caused by the global pandemic and worldwide production shutdowns, which resulted in severe and unprecedented component shortages throughout our industry.  Accordingly, since supply chain shortages have ceased, we have stopped incurring these charges, and do not reasonably expect these costs to be incurred in future periods nor do we believe the underlying events that resulted in these costs will reoccur.  However, the remaining amount of these incremental costs that are within inventory costs on our balance sheet that will be sold in future periods is only $1.6 million.  Therefore, we expect these charges to be immaterial in future periods.

•The non-GAAP adjustments for excess and obsolete inventory charges relate to trade restrictions and revenue from customers outside the United States represented between 86% and 92% of total revenue during the periods presented and this aspect of your business is discussed and addressed under risk factors.

With respect to excess and obsolete inventory charges and the impact of export control restrictions, we respectfully advise the Staff that the restrictions in question that resulted in the excess and obsolete charges that were excluded from our non-GAAP measures are not the customary trade restrictions we have experienced in the normal course of our business operations.  The excess and obsolete inventory charges related to inventory that we would have sold to one customer, Huawei, absent export control restrictions. We have had significant product design wins, orders, and a solid track record of profitable sales to Huawei throughout our history, and if not for the export control restrictions against Huawei, the excess and obsolete charges in question would not have occurred.  We note that Costs of selling outside the United States, including import duties, value-added tax (VAT), tariffs, and other similar costs are included in our non-GAAP Cost of Goods sold as they are part of our normal operations and cost of doing business outside of the U.S.

To provide additional context for the charges and the impact to our business, we would like to summarize to the Staff the history of the export control restrictions imposed by the United States Department of Commerce, Bureau of Industry and Security (“BIS”) against Huawei and the corresponding impact to the Company and our operating results.  In August 2020, BIS adopted the Entity List Foreign-Produced Direct Product (“FDP”) Rule, as set forth in §734.9(e)(1)(i) of the Export Administration Regulations (“EAR”), also known as the Huawei Foreign-Produced Direct Product Rule (Huawei FDP Rule), which significantly expanded the scope of items subject to the EAR to include any non-U.S. produced telecommunications, semiconductor, and other items that were produced using certain types of U.S. equipment.  Due to the novel nature of this restriction, companies in the industry adopted differing interpretations. When the Huawei FDP Rule was first released, Lumentum took reasonable steps to understand the applicability of the restrictions and compliance requirements. At that time, Lumentum determined that its products were not subject to the EAR under the Huawei FDP Rule and continued to ship products to Huawei.

In April 2023, BIS settled a civil penalty case with Seagate Technology Holdings plc for violations of the Huawei FDP Rule.   In the corresponding press release and settlement agreement, BIS clarified certain interpretations regarding the Huawei FDP Rule, as well as its expectations of industry.  In response, Lumentum engaged external trade counsel to review and assess its processes for determining whether its' products are subject to the EAR when shipped to Huawei.

External trade counsel reviewed each of the product lines that Lumentum was shipping to Huawei.  This product-by-product analysis of the each Lumentum product line was very fact intensive and highly complex.   As such, the analysis for each product line was very

time consuming and occurred over several quarters and completed at different points in time.

If Lumentum concluded based on this further analysis that a product was subject to the EAR, we stopped shipments of the affected product line. The timeline below provides the dates for the stop shipment notifications for the product lines at issue, which corresponds to the time period in which we completed our review:

•From June to October 2023, Lumentum stopped shipment of the five pump laser models that were actively shipping to Huawei.

•On September 15, 2023, Lumentum stopped shipment on all transceiver products.

•From September to October 2023, Lumentum stopped shipment of the two datacom parts to Huawei.

•On October 31, 2023, Lumentum stopped shipment on all High-Reliability products.

•On October 31, 2023, Lumentum stopped shipment on all High Bandwidth Coherent Driver Modulator products.

•On October 31, 2023, Lumentum stopped shipment on all Narrow Linewidth Laser products.

•On October 31, 2023, Lumentum stopped shipment on all Vertical-Cavity Surface-Emitting Laser products.

•On December 21, 2023, Lumentum stopped shipment on Wavelength Selective Switches that contain the Xilinx integrated circuit.

•On March 7, 2024, Lumentum stopped shipment on all Neophotonics gold box tunable lasers.

As a result of the determination to stop shipping these product lines because the products are subject to the EAR, we assessed the volume of our potential excess and obsolete inventory as these products could no longer be sold to Huawei and could not be sold to any another customer.  Accordingly, our excess and obsolete charges related to the Huawei business occurred at different times in calendar year 2023 and 2024.  We note that the revenue from customers referenced in the Staff’s comment is all revenue attributable to non-US sales and that sales to Huawei in Q3FY24 were near zero ($0.1 million) compared to previous quarterly averages of approximately $50 million ($188 million in fiscal year 2021, and $221 million in fiscal year 2020).  Effectively, all product lines that used to generate revenue and profits on sales to Huawei have ceased as a direct

result of the export control restrictions noted above.  Finally, we would like to highlight to the Staff that as a result of the above, all of our inventory which is custom produced for Huawei has already been written off as excess and obsolete, and we do not expect material charges for Huawei-related products in the future.

•The non-GAAP adjustments for abnormal excess capacity are in addition to restructuring costs and, based on your disclosure, reflect excess costs over a "historical normalized run rate".

Based on the nature of your business, customers, and the information you have provided, it continues to appear to us that these non-GAAP adjustments represent normal operating costs necessary to operate your business. Please revise future filings to not exclude these expenses from any non-GAAP performance measures in current, future or prior periods since they do not appear to comply with Question 100.01 of the Division of Corporation Finance's Compliance & Disclosure Interpretations on Non-GAAP Financial Measures.

With respect to abnormal excess capacity, we submit to the Staff that the term: “abnormal excess capacity” was selected for 1) ease of understanding by the investor community, and 2) to communicate to investors that the excess capacity costs excluded were not incurred in the ordinary course of our business.  For example, excess capacity that may occur after a customer of a custom product switches to a competitor’s product would not be excluded from our non-GAAP financial measures.  We further note that expenses for excess capacity caused by ongoing fluctuations in customer demand are not excluded from our non-GAAP measures.  Prior to Q2FY24, no excess capacity amounts had ever been excluded from our non-GAAP measures, and since then, only a portion of the excess capacity amounts, that portion related to the items discussed below, have been excluded.  In Q3FY24, we recognized a total of $24.1M of excess capacity charges.  Of this amount, $12.3M was included in our non-GAAP financial measures, and $11.9 million was excluded.

We respectfully advise the Staff that the “abnormal excess capacity” that was excluded from our non-GAAP results was attributable to three significant, discrete and non-ordinary course factors, as described below:

1.Export control restrictions against Huawei

The export control restrictions against Huawei that caused excess and obsolete inventory, as detailed above, have also resulted in excess manufacturing capacity.  We are in the process of restructuring our manufacturing operations to eliminate such additional excess capacity in the future, but we have experienced additional costs and expenses related thereto.  The costs associated with these specific restructuring items are included in the

“abnormal excess capacity” category, and we do not expect these costs to recur as part of our normal business operations.

2.Covid-19 Pandemic, resulting supply chain constraints, and industry-wide overcorrection

Our business and our customers’ businesses were severely and negatively impacted by the worldwide logistics and supply chain issues caused by the COVID-19 pandemic.  The COVID-19 pandemic also created dynamics in the semiconductor component supply chains that led to shortages of the types of components we and our customers require in our products.  In response to these component shortages, many of our customers accumulated significant inventory from us and our competitors.  As supply conditions began to improve in the second half of fiscal 2023, customers are only now beginning to manage inventory down by significantly cutting their orders and in some cases not taking the shipments we had originally projected.  As customers actively manage their inventory down, our manufacturing capacity has been significantly underutilized due to capacity that we enabled based on the previously forecasted demand that surged during the COVID-19 pandemic. While we expect this trend to continue to impact our business during the calendar year 2024, it is not reflective of normal operating conditions in our industry.

These two aforementioned factors are unprecedented in our Company’s history, and should not be considered either normal or recurring.  Furthermore, we do not reasonably expect these factors to recur in the foreseeable future.

3.Post-Acquisition Facility Consolidation

Following the acquisition of NeoPhotonics and the acquisition of Cloud Light Technology Limited (“Cloud Light”), we are incurring significant, temporary costs to consolidate our manufacturing footprint and synergize our operations.  See commentary below with respect to integration costs.

In addition to the integration costs described below, during periods where production lines and facilities are being shut down, transferred and requalified in new facilities, we incur excess capacity charges that are temporary in nature.  These restructuring activities and related costs will cease when the manufacturing lines restart production in new locations.  We believe the exclusion of such temporary excess capacity charges is not inconsistent with Question 100.01 of the Division of Corporation Finance's Compliance & Disclosure Interpretations on Non-GAAP Financial Measures, as they are temporary in nature and related to actions that are not part of our normal operations.

2.    In regard to your other non-GAAP adjustments, please more fully address the following:

For the non-GAAP adjustments for legal fees related to certain non-ordinary course litigation matters, tell us the amounts related to each legal matter you identified in your response letter during the last two fiscal years and current interim period.

Lumentum respectively acknowledges the Staff’s comment regarding our current presentation of non-GAAP financial measures in the Form 8-K and the request for more information to fully address non-GAAP adjustments related to litigation matters and integration related costs.  We address these two matters individually below.

Litigation expenses

Excluded litigation