NeoPhotonics Corporation (NPTN)

Lumentum on Tuesday reported fiscal fourth-quarter earnings and sales that topped estimates. But LITE stock fell as EPS guidance came in below expectations.

SAN JOSE, Calif. , July 29, 2022 /PRNewswire/ -- Lumentum Holdings Inc. (NASDAQ: LITE) ("Lumentum") and NeoPhotonics Corporation (NYSE: NPTN) ("NeoPhotonics") today announced, in connection with Lumentum's pending acquisition of NeoPhotonics, that Lumentum has obtained antitrust clearance from the People's Republic of China's State Administration for Market Regulation.

NeoPhotonics (NPTN) delivered earnings and revenue surprises of 150% and 1.01%, respectively, for the quarter ended June 2022. Do the numbers hold clues to what lies ahead for the stock?

SAN JOSE, Calif.--(BUSINESS WIRE)--NeoPhotonics Corporation (NYSE: NPTN), a leading developer of silicon photonics and advanced hybrid photonic integrated circuit-based lasers, modules and subsystems for bandwidth-intensive, high-speed communications networks, today announced financial results for its second quarter of 2022. “Our business remains on a strong growth path with revenue of $95 million, 46% above the same quarter last year and also up 46% year-to-date. This was despite ongoing suppl

SAN JOSE, Calif.--(BUSINESS WIRE)--NeoPhotonics Corporation (NYSE: NPTN), a leading developer of silicon photonics and advanced hybrid photonic integrated circuit-based lasers, modules and subsystems for bandwidth-intensive, high-speed communications networks, today announced financial results for its second quarter of 2022. “Our business remains on a strong growth path with revenue of $95 million, 46% above the same quarter last year and also up 46% year-to-date. This was despite ongoing supply chain limitations which had an adverse impact on revenue of approximately $10 million. Our 400G and above products grew approximately 105% year-over-year, and now comprise 64% of total revenue. Our revenue from 400ZR coherent DCO module products to datacenter customers is now in low millions per quarter,” said Tim Jenks, Chairman and CEO of NeoPhotonics. “In addition to 400ZR, we are ramping our 96 Gbaud components and sampling 130 Gbaud for even higher data rate applications. These new component products, together with our ramping 400ZR and CFP2 400G module products, give us confidence in continued growth for the quarters ahead, despite the expected challenges with IC chip supply shortages.” Mr. Jenks continued, “I would like to thank NeoPhotonics employees for their continued commitment, which has built the Company’s strong technology leadership for high speed over distance applications and has resulted in the Company’s strong performance in the second quarter of 2022.” Mr. Jenks concluded, “The Lumentum transaction, announced last November, remains on track having been approved by our shareholders and received antitrust clearance from US regulators. We look forward to securing regulatory approval in China and closing the transaction. Our strong quarter with more than 46% year over year revenue growth, GAAP operating profit and significant growth from western customers, reflects our success in pivoting our business following the loss of revenue in 2020 due to Department of Commerce restrictions on certain Chinese customers.” Second Quarter 2022 Summary Revenue of $95.0 million was up 46% year-over-year on growth in 400G and above capable products and up 6% quarter-over-quarter. Supply chain shortages negatively impacted revenue by approximately $10 million in the second quarter. Demand remains strong and chip supply continues to constrain revenue. Three customers were greater than 10% of our revenue for the three months ended June 30, 2022 and our top five customers accounted for 83% of our revenue in the quarter versus 77% in the same quarter last year. Gross margin was 34.8%, up nearly 20 percentage points year-over-year on improved factory utilization and up 4.2 percentage points from the prior quarter on meaningful yield improvements. Non-GAAP gross margin was 35.2% up from 21.7% in the same quarter last year and 31.2% in the prior quarter. Operating expense was $26.7 million, down $3.4 million from Q1’22 on a gain on the sale of our Fremont wafer fab and lower costs related to the sale. Non-GAAP operating expense of $24.1 million, down $0.9 million from Q1’22 on lower R&D materials & operating costs of the Fremont site. Operating income was $6.4 million, compared to a loss of $2.8 million in Q1’22 and a loss of $16.3 million in Q2’21, driven by the significant improvement in revenue and gross margin. Non-GAAP operating income was $9.4 million, compared to a loss of $10.3 million in Q2’21 and a profit of $2.8 million in the prior quarter, a notable turnaround in results. Foreign Exchange was a gain of $6.0 million on the appreciation of the U.S. dollar. As a reminder, the foreign exchange impact is largely related to the revaluation of U.S. dollar assets on our overseas books which are stated in their local currency. Beginning this quarter, we will exclude unrealized foreign exchange from our Non-GAAP results, to better focus on our operational results. Net earnings per share was $0.17, compared to net loss of $0.34 a year ago and a loss of $0.06 per share in the prior quarter. Non-GAAP net income per share was $0.15, compared to a Non-GAAP loss per share of $0.22 a year ago and a Non-GAAP earnings per share of $0.04 in the prior quarter. Excluding the impact of unrealized foreign exchange in the prior quarters, earnings per share was a loss of $0.22 in Q2’21 and an income of $0.05 in Q1’22. Adjusted EBITDA was $13.2 million, up from $7.8 million in the prior quarter excluding the impact of unrealized foreign exchange. Net Inventory grew $5.8 million from Q1’22, to $66 million, as we increased 400ZR inventories to a total of $20 million to ensure ongoing module supply. As of June 30, 2022, cash and cash equivalents, short-term investments and restricted cash totaled $105 million, down approximately $2.0 million from Q1’22. Capital Expenditure was $3 million. Non-GAAP results in the second quarter of 2022 exclude gains of $5.4 million for unrealized foreign exchange, $1.9 million on the sale of assets, expenses of $2.6 million for stock-based compensation, $2.0 million of merger retention and other acquisition related charges, income tax effect of $1.4 million for Non-GAAP items and $0.2 million of other charges. A reconciliation of the non-GAAP and Adjusted EBITDA financial measures to the most directly comparable GAAP financial measures is provided in the financial schedules portion at the end of this press release. NeoPhotonics Product Milestone Achievements Products capable of use for 400G and above applications were 64% of revenue in Q2 2022. Continued to ramp production of our 400ZR small form factor coherent transceiver modules, reaching low single digit millions in revenue. Shipped first samples of 130 Gbaud Coherent Receivers and Modulators for next generation 800G and 1.6T links. Conducted webinar outlining the application of NeoPhotonics coherent products and technology to Lidar for Autonomous Vehicles and other remote sensing applications. Supply Chain Impacts Second quarter revenue was approximately $10 million lower than we project it would have been without supply chain constraints. Supply chain impacts in the quarter were primarily shortages of analog and power semiconductors. The Company expects such impacts to continue through 2022. Non-GAAP and Adjusted EBITDA Measures vs. GAAP Financial Measures The Company’s non-GAAP and Adjusted EBITDA measures exclude certain GAAP financial measures. A reconciliation of the non-GAAP and Adjusted EBITDA financial measures to the most directly comparable GAAP financial measures is provided in the financial schedules portion at the end of this press release. These non-GAAP financial measures differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. NeoPhotonics believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business. Conference Call The Company will not host a conference call regarding the Q2 2022 results. About NeoPhotonics NeoPhotonics is a leading developer and manufacturer of lasers and optoelectronic solutions that transmit, receive and switch high-speed digital optical signals for Cloud and hyper-scale data center internet content provider and telecom networks. The Company’s products enable cost-effective, high-speed over distance data transmission and efficient allocation of bandwidth in optical networks. NeoPhotonics maintains headquarters in San Jose, California and ISO 9001:2015 certified engineering and manufacturing facilities in Silicon Valley (USA), Japan and China. For additional information visit www.neophotonics.com. Notice Regarding Forward-Looking Statements This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events, including the timing of the proposed transaction, information related to the proposed transaction, and supply chain constraints. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern the proposed transaction and our expectations, strategy, plans or intentions regarding it. Forward-looking statements in this communication include, but are not limited to, (i) expectations regarding the timing, completion and expected benefits of the proposed transaction, (ii) expected continued supply chain impacts, plans, objectives and intentions with respect to future operations, customers and the market, and (iii) future growth and profitability. Expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the risk that the transaction may not be completed in a timely manner or at all; the ability to secure additional regulatory approvals on the terms expected in a timely manner or at all; the effect of the announcement or pendency of the transaction on our business relationships, results of operations and business generally; ability to win customer awards; risks that the proposed transaction disrupts current plans and operations; the risk of litigation and/or regulatory actions related to the proposed transaction; disruptions and shortages in supply chains; impact of inflation on our business; potential impacts of the Covid-19 pandemic; changing supply and demand conditions in the industry; and general market, political, economic, and business conditions. The forward-looking statements contained in this communication are also subject to other risks and uncertainties, including those more fully described in filings with the Securities and Exchange Commission ("SEC"), including reports filed on Form 10-K, 10-Q and 8-K and in other filings made by NeoPhotonics with the SEC from time to time and available at www.sec.gov. These forward-looking statements are based on current expectations, and are based on NeoPhotonics’ current expectations which is subject to change. The parties undertake no obligation to update the information contained in this communication or any other forward-looking statement. ©2022 NeoPhotonics Corporation. All rights reserved. NeoPhotonics and the red dot logo are trademarks of NeoPhotonics Corporation. All other marks are the property of their respective owners. NeoPhotonics Corporation Condensed Consolidated Balance Sheets (Unaudited) (In thousands) As of Jun. 30, 2022 Dec. 31, 2021 ASSETS Current assets: Cash and cash equivalents $ 77,079 $ 77,833 Short-term investments 27,720 27,675 Restricted cash 38 87 Accounts receivable, net 68,460 55,324 Inventories 65,510 52,896 Prepaid expenses and other current assets 18,927 16,246 Total current assets 257,734 230,061 Property, plant and equipment, net 49,191 54,190 Operating lease right-of-use assets 12,091 13,201 Purchased intangible assets, net 787 844 Goodwill 1,115 1,115 Other long-term assets 5,636 6,156 Total assets $ 326,554 $ 305,567 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 69,685 $ 58,125 Short-term borrowing, net — 14,914 Current portion of long-term debt 2,449 2,928 Accrued and other current liabilities 29,327 30,008 Total current liabilities 101,461 105,975 Long-term debt, net of current portion 23,945 25,753 Related party long-term debt 29,954 — Operating lease liabilities, noncurrent 12,107 13,441 Other noncurrent liabilities 6,813 7,437 Total liabilities 174,280 152,606 Stockholders’ equity: Common stock 134 133 Additional paid-in capital 614,553 610,085 Accumulated other comprehensive income (loss) (8,782 ) 2,376 Accumulated deficit (453,631 ) (459,633 ) Total stockholders’ equity 152,274 152,961 Total liabilities and stockholders’ equity $ 326,554 $ 305,567 NeoPhotonics Corporation Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except percentages and per share data) Three Months Ended Six Months Ended Jun. 30, 2022 Mar. 31, 2022 Jun. 30, 2021 Jun. 30, 2022 Jun. 30, 2021 Revenue $ 95,006 $ 89,268 $ 65,010 $ 184,274 $ 125,935 Cost of goods sold (1) 61,935 61,979 55,135 123,914 102,721 Gross profit 33,071 27,289 9,875 60,360 23,214 Gross margin 34.8 % 30.6 % 15.2 % 32.8 % 18.4 % Operating expenses: Research and development (1) 14,736 15,098 15,410 29,834 28,508 Sales and marketing (1) 3,742 3,686 3,362 7,428 7,227 General and administrative (1) (2) 9,228 9,794 7,398 19,022 14,692 Acquisition and asset sale related costs (recoveries) 638 905 (36 ) 1,543 127 Restructuring charges — — 22 — 22 Asset impairment charges 30 413 — 443 — Facility shutdown related costs 209 300 — 509 — Litigation Settlement (12 ) 49 — 37 — Gain on asset sale (1,866 ) (114 ) — (1,980 ) — Total operating expenses 26,705 30,131 26,156 56,836 50,576 Income (loss) from operations 6,366 (2,842 ) (16,281 ) 3,524 (27,362 ) Interest income 147 71 140 218 245 Interest expense (510 ) (355 ) (220 ) (865 ) (447 ) Other income (expense), net 5,823 395 (880 ) 6,218 263 Total interest and other income (expense), net 5,460 111 (960 ) 5,571 61 Income (loss) before income taxes 11,826 (2,731 ) (17,241 ) 9,095 (27,301 ) Income tax provision (2,521 ) (572 ) (191 ) (3,093 ) (823 ) Net income (loss) $ 9,305 $ (3,303 ) $ (17,432 ) $ 6,002 $ (28,124 ) Basic net income (loss) per share $ 0.17 $ (0.06 ) $ (0.34 ) $ 0.11 $ (0.55 ) Diluted net income (loss) per share $ 0.17 $ (0.06 ) $ (0.34 ) $ 0.11 $ (0.55 ) Weighted average shares used to compute basic net income (loss) per share 53,488 53,146 51,634 53,318 51,178 Weighted average shares used to compute diluted net income (loss) per share 56,095 53,146 51,634 55,999 51,178 (1) Includes stock-based compensation expense as follows for the periods presented: Cost of goods sold $ 404 $ 525 $ 572 $ 929 $ 1,120 Research and development 794 774 744 1,568 1,606 Sales and marketing 400 385 261 785 815 General and administrative 1,011 931 763 1,942 2,076 Total stock-based compensation expense $ 2,609 $ 2,615 $ 2,340 $ 5,224 $ 5,617 (2) Includes $1,359 and $2,810 of retention costs related to the acquisition for the three and six months ended June 30, 2022, respectively. NeoPhotonics Corporation Reconciliation of Condensed Consolidated GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited) (In thousands, except percentages and per share data) Three Months Ended Six Months Ended Jun. 30, 2022 Mar. 31, 2022 Jun. 30, 2021 Jun. 30, 2022 Jun. 30, 2021 NON-GAAP GROSS PROFIT: GAAP gross profit $ 33,071 $ 27,289 $ 9,875 $ 60,360 $ 23,214 Stock-based compensation expense 404 525 572 929 1,120 Amortization of purchased intangible assets 7 8 153 15 338 Depreciation of acquisition-related fixed asset step-up 3 3 3 6 (3 ) End-of-life related inventory write-down — — 3,257 — 2,680 Accelerated depreciation — — 157 — 331 Restructuring charges (recoveries) — (18 ) 113 (18 ) 113 Non-GAAP gross profit $ 33,485 $ 27,807 $ 14,130 $ 61,292 $ 27,793 Non-GAAP gross margin as a % of revenue 35.2 % 31.2 % 21.7 % 33.3 % 22.1 % NON-GAAP TOTAL OPERATING EXPENSES: GAAP total operating expenses $ 26,705 $ 30,131 $ 26,156 $ 56,836 $ 50,576 Stock-based compensation expense (2,205 ) (2,090 ) (1,768 ) (4,295 ) (4,497 ) Depreciation of acquisition-related fixed asset step-up (12 ) (14 ) (21 ) (26 ) (46 ) Acquisition and asset sale related costs (638 ) (905 ) 36 (1,543 ) (127 ) Retention costs related to acquisition (1,359 ) (1,451 ) — (2,810 ) — Restructuring charges — — (22 ) — (22 ) Asset impairment charges (30 ) (413 ) — (443 ) — Facility shutdown related costs (209 ) (300 ) — (509 ) — Litigation settlement 12 (49 ) — (37 ) — Gain on asset sale 1,866 114 — 1,980 — Non-GAAP total operating expenses $ 24,130 $ 25,023 $ 24,381 $ 49,153 $ 45,884 Non-GAAP total operating expenses as a % of revenue 25.4 % 28.0 % 37.5 % 26.7 % 36.4 % NON-GAAP OPERATING INCOME (LOSS): GAAP income (loss) from operations $ 6,366 $ (2,842 ) $ (16,281 ) $ 3,524 $ (27,362 ) Stock-based compensation expense 2,609 2,615 2,340 5,224 5,617 Amortization of purchased intangible assets 7 8 153 15 338 Depreciation of acquisition-related fixed asset step-up 15 17 24 32 43 Acquisition and asset sale related costs (recoveries) 638 905 (36 ) 1,543 127 Retention costs related to acquisition 1,359 1,451 — 2,810 — End-of-life related inventory write-down — — 3,257 — 2,680 Accelerated depreciation — — 157 — 331 Restructuring charges (recoveries) — (18 ) 135 (18 ) 135 Asset impairment charges 30 413 — 443 — Facility shutdown related costs 209 300 — 509 — Litigation settlement (12 ) 49 — 37 — Gain on asset sale (1,866 ) (114 ) — (1,980 ) — Non-GAAP income (loss) from operations $ 9,355 $ 2,784 $ (10,251 ) $ 12,139 $ (18,091 ) Non-GAAP operating margin as a % of revenue 9.8 % 3.1 % (15.8 )% 6.6 % (14.4 )% NeoPhotonics Corporation Reconciliation of Condensed Consolidated GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited) (Continued) (In thousands, except percentages and per share data) Three Months Ended Six Months Ended Jun. 30, 2022 Mar. 31, 2022 Jun. 30, 2021 Jun. 30, 2022 Jun. 30, 2021 NON-GAAP NET INCOME (LOSS): GAAP net income (loss) $ 9,305 $ (3,303 ) $ (17,433 ) $ 6,002 $ (28,124 ) Stock-based compensation expense 2,609 2,615 2,340 5,224 5,617 Amortization of purchased intangible assets 7 8 153 15 338 Depreciation of acquisition-related fixed asset step-up 15 17 24 32 43 Acquisition and asset sale related costs (recoveries) 638 905 (36 ) 1,543 127 Retention costs related to acquisition 1,359 1,451 — 2,810 — End-of-life related inventory write-down — — 3,257 — 2,680 Accelerated depreciation — — 157 — 331 Restructuring charges (recoveries) — (18 ) 135 (18 ) 135 Asset impairment charges 30 413 — 443 — Facility shutdown related costs 209 300 — 509 — Litigation settlement (12 ) 49 — 37 — Gain on asset sale (1,866 ) (114 ) — (1,980 ) — Unrealized foreign exchange (gain) loss, net (3) (5,386 ) 555 (153 ) (4,831 ) (3,672 ) Income tax effect of Non-GAAP adjustments 1,439 (83 ) 22 1,356 976 Non-GAAP net income (loss) $ 8,347 $ 2,795 $ (11,534 ) $ 11,142 $ (21,549 ) Non-GAAP net income (loss) as a % of revenue 8.8 % 3.1 % (17.7 )% 6.0 % (17.1 )% ADJUSTED EBITDA: GAAP net income (loss) $ 9,305 $ (3,303 ) $ (17,433 ) $ 6,002 $ (28,124 ) Stock-based compensation expense 2,609 2,615 2,340 5,224 5,617 Amortization of purchased intangible assets 7 8 153 15 338 Depreciation of acquisition-related fixed asset step-up 15 17 24 32 43 Acquisition and asset sale related costs (recoveries) 638 905 (36 ) 1,543 127 Retention costs related to acquisition 1,359 1,451 — 2,810 — End-of-life related inventory write-down — — 3,257 — 2,680 Accelerated depreciation — — 157 — 331 Restructuring charges (recoveries) — (18 ) 135 (18 ) 135 Asset impairment charges 30 413 — 443 — Facility shutdown related costs 209 300 — 509 — Litigation settlement (12 ) 49 — 37 — Gain on asset sale (1,866 ) (114 ) — (1,980 ) — Unrealized foreign exchange (gain) loss, net (3) (5,386 ) 555 (153 ) (4,831 ) (3,672 ) Interest expense, net 363 284 80 647 202 Income tax provision 2,521 572 191 3,093 823 Depreciation expense 3,438 4,035 5,771 7,473 11,774 Adjusted EBITDA $ 13,230 $ 7,769 $ (5,514 ) $ 20,999 $ (9,726 ) Adjusted EBITDA as a % of revenue 13.9 % 8.7 % (8.5 )% 11.4 % (7.7 )% BASIC AND DILUTED NET INCOME (LOSS) PER SHARE: GAAP basic net income (loss) per share $ 0.17 $ (0.06 ) $ (0.34 ) $ 0.11 $ (0.55 ) GAAP diluted net income (loss) per share $ 0.17 $ (0.06 ) $ (0.34 ) $ 0.11 $ (0.55 ) Non-GAAP basic net income (loss) per share $ 0.16 $ 0.05 $ (0.22 ) $ 0.21 $ (0.42 ) Non-GAAP diluted net income (loss) per share $ 0.15 $ 0.05 $ (0.22 ) $ 0.19 $ (0.42 ) SHARES USED TO COMPUTE GAAP AND NON-GAAP BASIC NET INCOME (LOSS) PER SHARE 53,488 53,146 51,634 53,518 51,178 SHARES USED TO COMPUTE GAAP DILUTED NET INCOME (LOSS) PER SHARE 56,095 53,146 51,634 55,999 51,178 SHARES USED TO COMPUTE NON-GAAP DILUTED NET INCOME (LOSS) PER SHARE 57,307 57,344 51,634 57,327 51,178 (3) The non-GAAP financial measures for the three and six months ended June 30, 2021, and the three months ended March 31, 2022, have been adjusted to conform to the current period presentation by removing unrealized foreign exchange (gain) loss, net.

SAN JOSE, Calif.--(BUSINESS WIRE)--NeoPhotonics Corporation (NYSE: NPTN), a leading developer of silicon photonics and advanced hybrid photonic integrated circuit-based lasers, modules and subsystems for bandwidth-intensive, high-speed communications networks, today announced management will host a conference call entitled “The Quest for Chip-Scale Lidar” to discuss trends in optical and related technologies for Lidar and autonomous vehicles on Monday, June 13, 2022 at 11:00 am ET. The session will focus on the application of coherent communications technologies developed by NeoPhotonics for high-speed optical networks to new Coherent, or FMCW, Lidar for autonomous vehicles. NeoPhotonics’ has developed, manufactured and shipped millions of coherent components for communications and this same technology will enable “chip-scale” implementations that Lidar systems companies can use to meet the cost, size, manufacturability and performance necessary for high volume automotive applications. This webinar will showcase NeoPhotonics coherent sensors and components for FMCW Lidar, including ultra-narrow linewidth tunable lasers, semiconductor optical amplifiers, photonic integrated Lidar engines and photonic integrated beam scanners with no moving parts. The event will be hosted by: Tim Jenks, Chairman and CEO Ferris Lipscomb, Ph.D., VP of Marketing Wupen Yuen, Ph.D., SVP and Chief Product Officer Ergun Canoglu, Ph.D., Senior Director To listen to the live webcast, please visit https://ir.neophotonics.com/events. A replay of the event will be available approximately one hour following the event at https://ir.neophotonics.com/events About NeoPhotonics NeoPhotonics is a leading developer and manufacturer of lasers and optoelectronic solutions that transmit, receive and switch high-speed digital optical signals for Cloud and hyper-scale data center internet content provider and telecom networks. The Company’s products enable cost-effective, high-speed over distance data transmission and efficient allocation of bandwidth in optical networks. NeoPhotonics maintains headquarters in San Jose, California and ISO 9001:2015 certified engineering and manufacturing facilities in Silicon Valley (USA), Japan and China. For additional information visit www.neophotonics.com. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 This press release includes statements that qualify as forward-looking statements under the Private Securities Litigation Reform Act of 1995, including anticipated future financial performance. Readers are cautioned that these forward-looking statements involve risks and uncertainties and are only predictions based on the company’s current expectations, estimates and projections The actual company results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks, uncertainties and assumptions. Certain risks and uncertainties that could cause the company’s results to differ materially from those expressed or implied by such forward-looking statements as well as other risks and uncertainties relating to the company’s business, are described more fully in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and the Company’s Quarterly Report on Form 8-K for the quarter ended March 31, 2022 filed with the Securities and Exchange Commission. ©2022 NeoPhotonics Corporation. All rights reserved. NeoPhotonics and the red dot logo are trademarks of NeoPhotonics Corporation. All other marks are the property of their respective owners.

SAN JOSE, Calif.--(BUSINESS WIRE)--NeoPhotonics Corporation (NYSE: NPTN), a leading developer of silicon photonics and advanced hybrid photonic integrated circuit-based lasers, modules and subsystems for bandwidth-intensive, high-speed communications networks, today announced management will host a conference call entitled “The Quest for Chip-Scale Lidar” to discuss trends in optical and related technologies for Lidar and autonomous vehicles on Monday, June 13, 2022 at 11:00 am ET. The session

SAN JOSE, Calif.--(BUSINESS WIRE)--NeoPhotonics Corporation (NYSE: NPTN), a leading developer of silicon photonics and advanced hybrid photonic integrated circuit-based lasers, modules and subsystems for bandwidth-intensive, high-speed communications networks, today announced management will host a conference call entitled “The Quest for Chip-Scale Lidar” to discuss trends in optical and related technologies for Lidar and autonomous vehicles on Monday, June 13, 2022 at 11:00 am ET. The session will focus on the application of coherent communications technologies developed by NeoPhotonics for high-speed optical networks to new Coherent, or FMCW, Lidar for autonomous vehicles. NeoPhotonics’ has developed, manufactured and shipped millions of coherent components for communications and this same technology will enable “chip-scale” implementations that Lidar systems companies can use to meet the cost, size, manufacturability and performance necessary for high volume automotive applications. This webinar will showcase NeoPhotonics coherent sensors and components for FMCW Lidar, including ultra-narrow linewidth tunable lasers, semiconductor optical amplifiers, photonic integrated Lidar engines and photonic integrated beam scanners with no moving parts. The event will be hosted by: Tim Jenks, Chairman and CEO Ferris Lipscomb, Ph.D., VP of Marketing Wupen Yuen, Ph.D., SVP and Chief Product Officer Ergun Canoglu, Ph.D., Senior Director To listen to the live webcast, please visit https://ir.neophotonics.com/events. A replay of the event will be available approximately one hour following the event at https://ir.neophotonics.com/events About NeoPhotonics NeoPhotonics is a leading developer and manufacturer of lasers and optoelectronic solutions that transmit, receive and switch high-speed digital optical signals for Cloud and hyper-scale data center internet content provider and telecom networks. The Company’s products enable cost-effective, high-speed over distance data transmission and efficient allocation of bandwidth in optical networks. NeoPhotonics maintains headquarters in San Jose, California and ISO 9001:2015 certified engineering and manufacturing facilities in Silicon Valley (USA), Japan and China. For additional information visit www.neophotonics.com. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 This press release includes statements that qualify as forward-looking statements under the Private Securities Litigation Reform Act of 1995, including anticipated future financial performance. Readers are cautioned that these forward-looking statements involve risks and uncertainties and are only predictions based on the company’s current expectations, estimates and projections The actual company results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks, uncertainties and assumptions. Certain risks and uncertainties that could cause the company’s results to differ materially from those expressed or implied by such forward-looking statements as well as other risks and uncertainties relating to the company’s business, are described more fully in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and the Company’s Quarterly Report on Form 8-K for the quarter ended March 31, 2022 filed with the Securities and Exchange Commission. ©2022 NeoPhotonics Corporation. All rights reserved. NeoPhotonics and the red dot logo are trademarks of NeoPhotonics Corporation. All other marks are the property of their respective owners.

NeoPhotonics, NPTN, is an optoelectronics manufacturer being acquired by one of its larger peers Lumentum, LITE. This is a highly strategic transaction that is likely to pass its main hurdle, Chinese antitrust review.

Here is how NeoPhotonics (NPTN) and Photronics (PLAB) have performed compared to their sector so far this year.

Semiconductor demand has been on the rise, proving beneficial for companies like ON Semiconductor Corporation (ON), NeoPhotonics Corporation (NPTN), Analog Devices (ADI) and Semtech Corporation (SMTC).

NeoPhotonics (NPTN) has been upgraded to a Zacks Rank #2 (Buy), reflecting growing optimism about the company's earnings prospects. This might drive the stock higher in the near term.

NeoPhotonics (NPTN) delivered earnings and revenue surprises of 233.33% and 8.67%, respectively, for the quarter ended March 2022. Do the numbers hold clues to what lies ahead for the stock?

SAN JOSE, Calif.--(BUSINESS WIRE)--NeoPhotonics Corporation (NYSE: NPTN), a leading developer of silicon photonics and advanced hybrid photonic integrated circuit-based lasers, modules and subsystems for bandwidth-intensive, high-speed communications networks, today announced financial results for its first quarter of 2022. “Our business remains on a strong growth path with revenue of $89 million, 47% above the same quarter last year. Our 400G and above products grew more than 70% year-over-year, and now comprise 61% of total revenue, despite the impacts of semiconductor chip shortages. Moreover, we are now shipping production 400ZR coherent DCO module products to leading customers, and we have extended our product reach to higher speeds and to new applications, such as communications in low earth orbit satellites,” said Tim Jenks, Chairman and CEO of NeoPhotonics. “Looking forward, while we continue to see strong demand for our products, we also expect continuing challenges with IC chip supply shortages, which could materially impact our results near term.” Mr. Jenks continued, “The Lumentum transaction, announced last November, remains on track having been approved by our shareholders and received antitrust clearance from US regulators. We believe Lumentum is an ideal partner to serve our customers on a larger scale and we look forward to securing regulatory approval in China and closing the transaction. Our 47% year on year revenue growth, non-GAAP operating profit and significant growth from western customers reflects our success in pivoting our business. We have overcome the loss of the majority of our revenue from our prior largest customer due to Department of Commerce restrictions, with growth from leading customers in high growth markets.” Mr. Jenks concluded, “I would like to thank NeoPhotonics employees for their continued commitment, which over the years has built the Company’s strong technology leadership for high speed over distance applications and has resulted in the Company’s strong performance in the first quarter of 2022.” First Quarter 2022 Summary Revenue of $89.3 million was up 47% year-over-year on growth in 400G and above capable products and up 11% quarter-over-quarter. Supply chain shortages negatively impacted revenue by approximately $10 million in the first quarter. While demand remains strong, we do not yet see supply chain constraints abating in 2022 and we expect revenue will vary based on chip supply. Gross margin was 30.6%, up 8.7 percentage points year-over-year on better utilization and up 5 percentage points from the prior quarter on a strong product mix. Non-GAAP gross margin was 31.2%, up from 22.4% in the same quarter last year and 26.6% in the prior quarter. The first quarter increase in underutilization charges, per normal seasonal patterns, was more than offset by the improved product mix and lower purchase price variance compared to Q4’21. Operating expense was $30.1 million, up slightly from Q4’21. Increases in R&D were mostly offset by lower costs related to the acquisition. Non-GAAP operating expense of $25.0 million increased $1.7 million from Q4’21 on higher R&D and G&A. Operating income was a loss of $2.8 million, compared to a loss of $11.1 million in Q1’21 and a loss of $9.1 million in Q4’21, driven by the dramatic improvement in revenue and gross margin. Non-GAAP operating income was $2.8 million, compared to a loss of $7.8 million in Q1’21 and a loss of $1.8 million in the prior quarter. Net loss per share was $0.06, compared to net loss of $0.21 a year ago and a loss of $0.20 per share in the prior quarter. Non-GAAP net income per share was $0.04, compared to a Non-GAAP loss per share of $0.15 a year ago and a Non-GAAP net loss per share of $0.06 in the prior quarter. Adjusted EBITDA was $7.2 million, up from $2.3 million in the prior quarter. Included in our GAAP results is a $0.4 million write-down of our final Russia balances remaining from our sale of the Russia operations in 2019. As of March 31, 2022, cash and cash equivalents, short-term investments and restricted cash totaled $107 million, up approximately $1.0 million from Q4’21. Non-GAAP results in the first quarter of 2022 exclude $2.6 million of stock-based compensation, $2.4 million of acquisition related charges and $0.7 million of asset impairment charges, facility shut down related costs and other charges. A reconciliation of the non-GAAP and Adjusted EBITDA financial measures to the most directly comparable GAAP financial measures is provided in the financial schedules portion at the end of this press release. NeoPhotonics Product Milestone Achievements Products capable of use for 400G and above applications were 61% of revenue in Q1 2022 Demonstrated our QSFP-DD and OSFP coherent modules interoperate with multiple vendors’ products in the OIF 400ZR Interoperability Demonstration at the Optical Fiber Communications Conference Introduced a radiation tolerant version of our Ultra-Pure Color Tunable Laser with enhanced flexible software to extend operating life in a radiation environment enabling use in Low Earth Orbit applications Announced sampling of Open ZR+ QSFP-DD small form-factor pluggable coherent modules for Metro-Regional applications designed to enhance performance in hyperscale data center and telecom networks Demonstrated Indium Phosphide components capable of 120 Gbaud operation supporting 800G applications within and between data centers (LR, ZR, and ZR+) Announced cumulative shipments of more than 1 million single and quad 53 Gbaud PAM4 Driver ICs for 100G DR1 and 400G [DR4 and FR4] hyperscale data center networks Supply Chain Impacts First quarter revenue was approximately $10 million lower than we project it would have been without supply chain constraints. Supply chain impacts in the quarter were primarily shortages of analog and power semiconductors. The Company expects such impacts to continue through 2022. Non-GAAP and Adjusted EBITDA Measures vs. GAAP Financial Measures The Company’s non-GAAP and Adjusted EBITDA measures exclude certain GAAP financial measures. A reconciliation of the non-GAAP and Adjusted EBITDA financial measures to the most directly comparable GAAP financial measures is provided in the financial schedules portion at the end of this press release. These non-GAAP financial measures differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. NeoPhotonics believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business. Conference Call The Company will not be hosting a conference call regarding the Q1 2022 results. About NeoPhotonics NeoPhotonics is a leading developer and manufacturer of lasers and optoelectronic solutions that transmit, receive and switch high-speed digital optical signals for Cloud and hyper-scale data center internet content provider and telecom networks. The Company’s products enable cost-effective, high-speed over distance data transmission and efficient allocation of bandwidth in optical networks. NeoPhotonics maintains headquarters in San Jose, California and ISO 9001:2015 certified engineering and manufacturing facilities in Silicon Valley (USA), Japan and China. For additional information visit www.neophotonics.com. Notice Regarding Forward-Looking Statements This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events, including the timing of the proposed transaction, information related to the proposed transaction, and supply chain constraints. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern the proposed transaction and our expectations, strategy, plans or intentions regarding it. Forward-looking statements in this communication include, but are not limited to, (i) expectations regarding the timing, completion and expected benefits of the proposed transaction, and (ii) expected continued supply chain impacts, plans, objectives and intentions with respect to future operations, customers and the market. Expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the risk that the transaction may not be completed in a timely manner or at all; the ability to secure additional regulatory approvals on the terms expected in a timely manner or at all; the effect of the announcement or pendency of the transaction on our business relationships, results of operations and business generally; risks that the proposed transaction disrupts current plans and operations; the risk of litigation and/or regulatory actions related to the proposed transaction; disruptions and shortages in supply chains; potential impacts of the Covid-19 pandemic; changing supply and demand conditions in the industry; and general market, political, economic and business conditions. The forward-looking statements contained in this communication are also subject to other risks and uncertainties, including those more fully described in filings with the Securities and Exchange Commission, including reports filed on Form 10-K, 10-Q and 8-K and in other filings made by NeoPhotonics and Lumentum with the SEC from time to time and available at www.sec.gov. These forward looking statements are based on current expectations, and with regard to the proposed transaction, are based on Lumentum’s and NeoPhotonics’ current expectations, all of which are subject to change. The parties undertake no obligation to update the information contained in this communication or any other forward-looking statement. ©2022 NeoPhotonics Corporation. All rights reserved. NeoPhotonics and the red dot logo are trademarks of NeoPhotonics Corporation. All other marks are the property of their respective owners. NeoPhotonics Corporation Condensed Consolidated Balance Sheets (Unaudited) (In thousands) As of Mar. 31, 2022 Dec. 31, 2021 ASSETS Current assets: Cash and cash equivalents $ 79,044 $ 77,833 Short-term investments 27,677 27,675 Restricted cash 87 87 Accounts receivable, net 63,838 55,324 Inventories 59,737 52,896 Prepaid expenses and other current assets 20,022 16,246 Total current assets 250,405 230,061 Property, plant and equipment, net 53,058 54,190 Operating lease right-of-use assets 12,694 13,201 Purchased intangible assets, net 839 844 Goodwill 1,115 1,115 Other long-term assets 6,123 6,156 Total assets $ 324,234 $ 305,567 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 61,499 $ 58,125 Notes payable and short-term borrowing — 14,914 Current portion of long-term debt 2,722 2,928 Accrued and other current liabilities 33,348 30,008 Total current liabilities 97,569 105,975 Long-term debt, net of current portion 24,880 25,753 Related party long-term debt 29,977 — Operating lease liabilities, noncurrent 12,814 13,441 Other noncurrent liabilities 7,483 7,437 Total liabilities 172,723 152,606 Stockholders’ equity: Common stock 133 133 Additional paid-in capital 612,946 610,085 Accumulated other comprehensive income 1,368 2,376 Accumulated deficit (462,936 ) (459,633 ) Total stockholders’ equity 151,511 152,961 Total liabilities and stockholders’ equity $ 324,234 $ 305,567 NeoPhotonics Corporation Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except percentages and per share data) Three Months Ended Mar. 31, 2022 Dec. 31, 2021 Mar. 31, 2021 Revenue $ 89,268 $ 80,612 $ 60,926 Cost of goods sold (1) 61,979 60,012 47,587 Gross profit 27,289 20,600 13,339 Gross margin 30.6 % 25.6 % 21.9 % Operating expenses: Research and development (1) 15,098 14,103 13,098 Sales and marketing (1) 3,686 3,814 3,865 General and administrative (1) (2) 9,794 8,053 7,294 Acquisition and asset sale related costs 905 3,578 163 Restructuring charges — 4 — Asset impairment charges 413 — — Facility shut down related costs 300 — — Litigation settlements 49 240 — Gain on asset sale (114 ) (58 ) — Total operating expenses 30,131 29,734 24,420 Loss from operations (2,842 ) (9,134 ) (11,081 ) Interest income 71 70 105 Interest expense (355 ) (315 ) (227 ) Other income (expense), net 395 (927 ) 1,143 Total interest and other income (expense), net 111 (1,172 ) 1,021 Loss before income taxes (2,731 ) (10,306 ) (10,060 ) Income tax provision (572 ) (429 ) (632 ) Net loss $ (3,303 ) $ (10,735 ) $ (10,692 ) Basic net loss per share $ (0.06 ) $ (0.20 ) $ (0.21 ) Diluted net loss per share $ (0.06 ) $ (0.20 ) $ (0.21 ) Weighted average shares used to compute basic net loss per share 53,146 52,895 50,717 Weighted average shares used to compute diluted net loss per share 53,146 52,895 50,717 (1) Includes stock-based compensation expense as follows for the periods presented: Cost of goods sold $ 525 $ 493 $ 548 Research and development 774 794 862 Sales and marketing 385 380 554 General and administrative 931 1,515 1,313 Total stock-based compensation expense $ 2,615 $ 3,182 $ 3,277 (2) Includes $1,451 retention costs related to the acquisition for the three months ended March 31, 2022. NeoPhotonics Corporation Reconciliation of Condensed Consolidated GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited) (In thousands, except percentages and per share data) Three Months Ended Mar. 31, 2022 Dec. 31, 2021 Mar. 31, 2021 NON-GAAP GROSS PROFIT: GAAP gross profit $ 27,289 $ 20,600 $ 13,339 Stock-based compensation expense 525 493 548 Amortization of purchased intangible assets 8 154 185 Depreciation of acquisition-related fixed asset step-up 3 4 (6 ) End-of-life related inventory write-down — — (577 ) Accelerated depreciation — 174 174 Restructuring charges (recoveries) (18 ) 58 — Non-GAAP gross profit $ 27,807 $ 21,483 $ 13,663 Non-GAAP gross margin as a % of revenue 31.2 % 26.6 % 22.4 % NON-GAAP TOTAL OPERATING EXPENSES: GAAP total operating expenses $ 30,131 $ 29,734 $ 24,420 Stock-based compensation expense (2,090 ) (2,689 ) (2,729 ) Depreciation of acquisition-related fixed asset step-up (14 ) (14 ) (25 ) Acquisition and asset sale related costs (905 ) (3,578 ) (163 ) Retention costs related to acquisition (1,451 ) — — Restructuring charges — (4 ) — Asset impairment charges (413 ) — — Facility shut down related costs (300 ) — — Litigation settlements (49 ) (240 ) — Gain on asset sale 114 58 — Non-GAAP total operating expenses $ 25,023 $ 23,267 $ 21,503 Non-GAAP total operating expenses as a % of revenue 28.0 % 28.9 % 35.3 % NON-GAAP OPERATING INCOME (LOSS): GAAP loss from operations $ (2,842 ) $ (9,134 ) $ (11,081 ) Stock-based compensation expense 2,615 3,182 3,277 Amortization of purchased intangible assets 8 154 185 Depreciation of acquisition-related fixed asset step-up 17 18 19 Acquisition and asset sale related costs 905 3,578 163 Retention costs related to acquisition 1,451 — — End-of-life related inventory write-down — — (577 ) Accelerated depreciation — 174 174 Restructuring charges (recoveries) (18 ) 62 — Asset impairment charges 413 — — Facility shut down related costs 300 — — Litigation settlement 49 240 — Gain on asset sale (114 ) (58 ) — Non-GAAP income (loss) from operations $ 2,784 $ (1,784 ) $ (7,840 ) Non-GAAP operating margin as a % of revenue 3.1 % (2.2 )% (12.9 )% NeoPhotonics Corporation Reconciliation of Condensed Consolidated GAAP Financial Measures to Non-GAAP Financial Measures (Unaudited) (Continued) (In thousands, except percentages and per share data) Three Months Ended Mar. 31, 2022 Dec. 31, 2021 Mar. 31, 2021 NON-GAAP NET INCOME (LOSS): GAAP net loss $ (3,303 ) $ (10,735 ) $ (10,692 ) Stock-based compensation expense 2,615 3,182 3,277 Amortization of purchased intangible assets 8 154 185 Depreciation of acquisition-related fixed asset step-up 17 18 19 Acquisition and asset sale related costs 905 3,578 163 Retention costs related to acquisition 1,451 — — End-of-life related inventory write-down — — (577 ) Accelerated depreciation — 174 174 Restructuring charges (recoveries) (18 ) 62 — Asset impairment charges 413 — — Facility shut down related costs 300 — — Litigation settlements 49 240 — Gain on asset sale (114 ) (58 ) — Income tax effect of Non-GAAP adjustments — (4 ) (2 ) Non-GAAP net income (loss) $ 2,323 $ (3,389 ) $ (7,453 ) Non-GAAP net income (loss) as a % of revenue 2.6 % (4.2 )% (12.2 )% ADJUSTED EBITDA: GAAP net loss $ (3,303 ) $ (10,735 ) $ (10,692 ) Stock-based compensation expense 2,615 3,182 3,277 Amortization of purchased intangible assets 8 154 185 Depreciation of acquisition-related fixed asset step-up 17 18 19 Acquisition and asset sale related costs 905 3,578 163 Retention costs related to acquisition 1,451 — — End-of-life related inventory write-down — — (577 ) Accelerated depreciation — 174 174 Restructuring charges (recoveries) (18 ) 62 — Asset impairment charges 413 — — Facility shut down related costs 300 — — Litigation settlements 49 240 — Gain on asset sale (114 ) (58 ) — Interest expense, net 284 245 122 Income tax provision 572 429 632 Depreciation expense 4,035 4,979 6,003 Adjusted EBITDA $ 7,214 $ 2,268 $ (694 ) Adjusted EBITDA as a % of revenue 8.1 % 2.8 % (1.1 )% BASIC AND DILUTED NET INCOME (LOSS) PER SHARE: GAAP basic net loss per share $ (0.06 ) $ (0.20 ) $ (0.21 ) GAAP diluted net loss per share $ (0.06 ) $ (0.20 ) $ (0.21 ) Non-GAAP basic net income (loss) per share $ 0.04 $ (0.06 ) $ (0.15 ) Non-GAAP diluted net income (loss) per share $ 0.04 $ (0.06 ) $ (0.15 ) SHARES USED TO COMPUTE GAAP AND NON-GAAP BASIC NET INCOME (LOSS) PER SHARE 53,146 52,895 50,717 SHARES USED TO COMPUTE GAAP DILUTED NET INCOME (LOSS) PER SHARE 53,146 52,895 50,717 SHARES USED TO COMPUTE NON-GAAP DILUTED NET INCOME (LOSS) PER SHARE 57,344 52,895 50,717

SAN JOSE, Calif.--(BUSINESS WIRE)--NeoPhotonics Corporation (NYSE: NPTN), a leading developer of silicon photonics and advanced hybrid photonic integrated circuit-based lasers, modules and subsystems for bandwidth-intensive, high-speed communications networks, today announced financial results for its first quarter of 2022. “Our business remains on a strong growth path with revenue of $89 million, 47% above the same quarter last year. Our 400G and above products grew more than 70% year-over-yea

SAN JOSE, Calif.--(BUSINESS WIRE)---- $NPTN #OFC22--NeoPhotonics Suite of 53 Gbaud PAM4 Driver ICs for 100G and 400G Hyperscale Data Center Networks - More than 1M Single & Quad Drivers Shipped