Alan Lowe on acquisition
From Lumentum (LITE) CEO On Future Of Cloud & A.I. · · Schwab Network
“We paid all cash for CloudLight and it's growing very rapidly. Historically Lumentum has been a participant in the cloud space at the component level or the optical chip level, which is only about 10 to 20% of that transceiver that CloudLight brings to our portfolio. Now we're playing at a higher level of integration and we're vertically integrated so our revenue for the same product or transceiver is now going to be between 5 and 10 times more than it was historically.”
On , Alan Lowe, Advisor & Director at LUMENTUM HOLDINGS INC, spoke about acquisition during Lumentum (LITE) CEO On Future Of Cloud & A.I. on Schwab Network.
About Alan Lowe
Alan Lowe, President and CEO of Lumentum Holdings, discussed the company's recent performance and strategic direction in a September 2024 interview. He stated that Lumentum exceeded its expectations for the latest quarter, though he noted that those expectations were low relative to the company's historic performance. Lowe highlighted the closure of the CloudLight acquisition as the most exciting part of the earnings announcement, describing it as an acquisition that adds to Lumentum's portfolio in the fastest-growing part of the markets it participates in. He explained that CloudLight, acquired for all cash and immediately accretive, allows Lumentum to play at a higher level of integration in the cloud space, increasing revenue per product by five to ten times compared to its previous component-level participation. Lowe also emphasized the role of high-speed optical interconnects in supporting artificial intelligence and machine learning applications, stating that these interconnects prevent GPUs from going idle and that the growth of data center interconnects is expected to exceed a 30% CAGR. He noted that Lumentum's first priority is integrating CloudLight and proliferating its products to other cloud operators, while continuing to invest in new product development and R&D. In a separate 2016 presentation, Lowe, then associated with Roadstone, discussed cost-effective solutions for complying with Part L of the Building Regulations in Ireland. He described the Roadstone thermal block as a lightweight concrete block with improved thermal properties that addresses thermal bridging, a key concern for heat loss and mold risk. Lowe stated that using the thermal block in building details can achieve lower y-values, improving building energy ratings, and cited a case study where incorporating the blocks in 10% of build details resulted in fabric cost savings of over seven thousand euros. He noted that the cost to incorporate the blocks is relatively small, between 500 to 700 euros, compared to potential savings of six to nine thousand euros on heating system costs, and that Roadstone provides design support including white value certification and modeling.