Samsung's bet on foldable phones faces major test with slimmer new model
SEOUL (Reuters) -Samsung Electronics on Wednesday unveiled thinner, lighter new foldable phones as it aims to fend off Chinese competition in the higher-margin, premium segment that remains untapped by arch rival Apple.
The stakes are high. The South Korean company lost its global smartphone crown to Apple in 2023, and faces growing competition from Chinese rivals like Huawei and Honor.
Meanwhile, Samsung's mainstay chip business has suffered a profit slump stemming in part from its delayed supply of artificial intelligence chips to Nvidia.
Samsung's mobile president and chief operating officer, Choi Won-joon, said his most important mission was to make Samsung a leader in AI-powered smartphones.
"I believe that foldable phones, integrated with AI features, are ready to become mainstream by offering unique, differentiated experience," he told Reuters in his first media interview since being promoted in March.
He said Samsung aims to take a leadership position in AI by enhancing cooperation with external partners like Google, unlike Apple, which has been using in-house AI technology that has faced delays in adding key features.
Samsung also in New York unveiled its first smartwatches equipped with Google's AI voice assistant, Gemini, which can make recommendations to the owner such as good locations for a run, as an example.
PREMIUM HALO
Samsung said in April that it was pushing ahead with a premium product strategy, as U.S. tariffs threatened to dampen demand and raise component costs.
The smartphone maker increased the U.S. price of Galaxy Z Fold 7 to $1,999 by 5% from its predecessor Fold 6, while introducing a less expensive version of its Galaxy Z Flip 7 clamshell phone, Flip 7 FE, priced at $899.
Galaxy Z Fold 7 is equipped with Qualcomm's fast processor, Snapdragon 8 Elite, while Galaxy Z Flip 7 is powered by Samsung's in-house Exynos chips.
Analysts said Samsung's new models tackled some of the issues with foldable phones such as bulkiness, and would create a premium halo around the brand. The Galaxy Z Fold 7 weighs 10% less than its predecessor and is 26% thinner.
But high prices and a lack of use cases mean foldable phones are likely to remain a niche segment, the analysts said, with data from research firm IDC showing they account for just 1.5% of the total smartphone market.
Research firm Canalys predicts Samsung's foldable shipments, which peaked in 2022, will remain flat or slightly declining in 2025, in line with the broader market's flat growth, according to data provided to Reuters.
Samsung's foldable smartphones account for 4% of its total phone sales but 16% of those priced over $800, Canalys said.
Its data shows Samsung's dominance of the foldable phone segment is being eroded by Honor and Huawei, which are enjoying strong sales, especially in China.
Samsung, which held its unveiling event in New York on Wednesday, will focus on the United States, Europe and South Korea for foldable phone sales, Choi said.
Choi said Samsung is "working hard" to develop tri-foldable phones, which users can fold three ways, without elaborating on the launch date.
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(1) The Company held $877.1 million in total cash, cash equivalents, and short-term investments at the end of the fourth quarter of fiscal year 2025, an increase of $10.4 million from the third quarter of fiscal year 2025. Full Fiscal Year 2025 Highlights: Net revenue for fiscal year 2025 was $1,645.0 million, with GAAP net income of $25.9 million, or $0.37 per diluted share. Net revenue for fiscal year 2024 was $1,359.2 million, with GAAP net loss of $546.5 million, or $8.12 per diluted share. Non-GAAP net income for fiscal year 2025 was $146.4 million, or $2.06 per diluted share. Non-GAAP net income for fiscal year 2024 was $29.8 million, or $0.44 per diluted share. (1) Financial Overview – Fiscal Fourth Quarter Ended June 28, 2025 Net Revenue by Segment ($ in millions) Q4 % of Q3 Q4 Change Industrial Tech 56.6 11.8 % 60.0 53.6 (5.7)% 5.6% Total $ 480.7 100.0 % $ 425.2 $ 308.3 13.1% 55.9% Expand Financial Overview – Fiscal Year Ended June 28, 2025 GAAP Results ($ in millions) FY 2025 FY 2024 Change Y/Y Net revenue $ 1,645.0 $ 1,359.2 21.0% GAAP Gross margin 28.0 % 18.5 % 950bps GAAP Operating loss (10.9 )% (31.9 )% 2,100bps Expand Non-GAAP Results ($ in millions) FY 2025 FY 2024 (1) Change Y/Y Net revenue $ 1,645.0 $ 1,359.2 21.0% Non-GAAP Gross margin 34.7 % 30.2 % 450bps Non-GAAP Operating margin (loss) 9.7 % (0.6 )% 1,030bps Expand Net Revenue by Segment ($ in millions) FY 2025 FY 2024 Change Y/Y Cloud & Networking $ 1,410.8 $ 1,084.9 30.0% Industrial Tech 234.2 274.3 (14.6)% Total $ 1,645.0 $ 1,359.2 21.0% Expand (1) During the first quarter of fiscal year 2025, the Company refined its methodology to report non-GAAP financial measures. The change does not impact the Company's financial position, cash flows, or GAAP consolidated results of operations. Prior period non-GAAP financial measures presented in this press release have been recast to conform to the current presentation. Expand The tables above provide comparisons of quarterly and annual results to prior periods, including sequential quarterly and year-over-year changes. A reconciliation between GAAP and non-GAAP financial measures is contained in this release under the section titled 'Use of Non-GAAP Financial Measures.' 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A live webcast of the call will be available in the Investors section of the Lumentum website at To listen to the live conference call, dial (833) 470-1428 or (404) 975-4839 and reference the conference ID 554196. Supporting materials outlining the Company's latest financial results will be posted on under the 'Events and Presentations' section concurrently with this earnings press release. Lumentum has used, and intends to continue to use, its Investor Relations website as means of disclosing material nonpublic information and for complying with its disclosure obligations under Regulation FD. This press release is also being furnished as an exhibit to a Current Report on Form 8-K filed with the Securities and Exchange Commission and will be available at About Lumentum Lumentum (NASDAQ: LITE) is a market-leading designer and manufacturer of innovative optical and photonic products enabling optical networking and laser applications worldwide. Lumentum optical components and subsystems are part of virtually every type of telecom, enterprise, and data center network. Lumentum lasers enable advanced manufacturing techniques and diverse applications including next-generation imaging and sensing capabilities. Lumentum is headquartered in San Jose, California with R&D, manufacturing, and sales offices worldwide. For more information, visit and follow Lumentum on LinkedIn, X (formerly known as Twitter), Facebook, Instagram and YouTube. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These include statements regarding: our belief and expectations with respect to our markets, including the cloud end market and the broader networking market, demand for our products, quarterly revenue, our ability to deliver at scale, and our guidance with respect to future net revenue, non-GAAP diluted earnings per share, and non-GAAP operating margins, and related assumptions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. Among the factors that could cause actual results to differ from those contemplated are: (a) uncertainty and volatility in the global markets, including uncertainty and volatility in the macroeconomic environment, volatility and uncertainty with respect to economic growth, inflationary pressures, changes in the political or economic environment, such as geopolitical conflicts, war, international trade regulation and restrictions (including tariffs, duties and export controls to be implemented by the U.S. and other countries), including for certain rare earth minerals, and the effect of such market disruptions on demand for our products, technology spending by our customers, our costs and expenses and our ability to obtain components for our products; (b) quarter-over-quarter product mix fluctuations, which can materially impact profitability measures due to the broad gross margin ranges across our portfolio; (c) decline of average selling prices across our businesses or increase in costs, either of which will also decrease our margins; (d) effects of seasonality; (e) the ability of our suppliers and contract manufacturers to meet production, quality, and delivery requirements for our forecasted demand; (f) changes in customer demand, including due to changes in inventory practices and end-customer demand; (g) our ability to attract and retain new customers, particularly in the cloud photonics and imaging and sensing markets; (h) the risk that our markets will not grow or develop as expected or that our strategies and ability to compete in those markets are not successful, (i) the risk that Lumentum's financing or operating strategies will not be successful; (j) risks related to our restructurings initiatives and changes to our operations; (k) failure to successfully integrate Cloud Light or other acquisitions into our business or that we will not achieve the expected benefits. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 2025 filed with the Securities and Exchange Commission, and in the Company's other filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the fiscal year ended June 28, 2025, which will be filed with the Securities and Exchange Commission, available at under the caption 'Risk Factors' and elsewhere. The forward-looking statements contained in this presentation are made as of the date hereof and the Company assumes no obligation to update such statements, except as required by applicable law. Category: Financial The following financial tables are presented in accordance with GAAP, unless otherwise specified. LUMENTUM HOLDINGS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, except per share data) (unaudited) June 29, 2024 ASSETS Current assets: Cash and cash equivalents $ 520.7 $ 436.7 Short-term investments 356.4 450.3 Accounts receivable, net 250.0 194.7 Inventories 470.1 398.4 Prepayments and other current assets 120.1 110.0 Total current assets 1,717.3 1,590.1 Property, plant and equipment, net 726.4 572.5 Operating lease right-of-use assets, net 27.9 72.8 Goodwill 1,060.9 1,055.8 Other intangible assets, net 465.1 617.5 Deferred tax asset 210.3 10.7 Other non-current assets 10.8 12.5 Total assets $ 4,218.7 $ 3,931.9 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 225.2 $ 126.3 Accrued payroll and related expenses 57.9 36.1 Accrued expenses 34.6 52.4 Current portion of long-term debt 10.6 — Operating lease liabilities, current 11.4 13.4 Other current liabilities 53.1 41.1 Total current liabilities 392.8 269.3 Long-term debt 2,562.6 2,503.2 Operating lease liabilities, non-current 23.6 43.0 Deferred tax liability 7.2 55.7 Other non-current liabilities 97.8 103.4 Total liabilities 3,084.0 2,974.6 Stockholders' equity: Common stock, $0.001 par value, 990 authorized shares; 69.8 and 67.9 shares issued and outstanding as of June 28, 2025 and June 29, 2024, respectively 0.1 0.1 Additional paid-in capital 1,986.8 1,835.0 Accumulated deficit (861.2 ) (887.1 ) Accumulated other comprehensive income 9.0 9.3 Total stockholders' equity 1,134.7 957.3 Total liabilities and stockholders' equity $ 4,218.7 $ 3,931.9 Expand Use of Non-GAAP Financial Measures In this press release, Lumentum provides investors with certain non-GAAP financial measures: gross profit, gross margin, research and development expense, selling, general and administrative expense, operating margin (loss), income (loss) from operations, interest and other income (expense), net, income before income taxes, provision for income taxes, net income (loss), and net income (loss) per share on a non-GAAP basis, as well as the non-GAAP financial measures of EBITDA and Adjusted EBITDA. Lumentum believes this non-GAAP financial information provides additional insight into the Company's on-going business operations and results, as well as cash generation, and has therefore chosen to provide this information to investors for a more consistent basis of comparison and to help them evaluate the results of the Company's on-going operations and enable more meaningful period to period comparisons. In addition, the Company believes that providing certain of these measures allows investors to better understand the Company's operating performance and cash flows and, importantly, to evaluate the methodology and information used by management to monitor, manage, evaluate and measure the Company's business, results of operations, and cash flows. However, investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, many of the adjustments to our GAAP financial measures reflect the exclusion of items that are recurring and will be reflected in our financial results for the foreseeable future. Moreover, the non-GAAP financial measures we present may be different from non-GAAP financial measures used by other companies or may not be comparable to similarly titled measurements reported by other companies, limiting their usefulness for comparison purposes. We do not consider non-GAAP financial measures to be a substitute for, or superior to, the information provided by GAAP financial measures, and the non-GAAP financial measures used in this press release should not be considered in isolation from measures of financial performance prepared in accordance with GAAP. Our non-GAAP financial measures used in this press release exclude (i) stock-based compensation, (ii) acquisition related costs, (iii) integration related costs, (iv) amortization of acquired intangibles, (v) amortization of acquired inventory fair value adjustments, (vi) restructuring and related charges, (vii) intangible assets write-off, (viii) gain on sale of facility, (ix) foreign exchange losses (gains), net, (x) non-cash interest expense on convertible notes, (xi) non-GAAP income tax reconciling adjustments, and (xii) other (gains) charges related to non-recurring activities. We utilize a long-term projected non-GAAP tax rate to compute our non-GAAP income tax provision. The long-term projected non-GAAP tax rate is based on a multi-year projection of our estimated annual GAAP income tax forecast, adjusted to account for the tax effect of non-GAAP pretax adjustments as well as the effects of significant non-recurring and period specific tax items. Our non-GAAP tax provision for fiscal year 2025 is 16.5%. The difference between our GAAP income tax provision and our non-GAAP income tax provision is presented as non-GAAP income tax reconciling adjustments. A quantitative reconciliation between GAAP and non-GAAP financial data with respect to historical periods is included in the supplemental financial table attached to this press release. June 28, 2025 March 29, 2025 June 29, 2024 (1) June 28, 2025 June 29, 2024 (1) Gross profit on GAAP basis $ 159.9 $ 122.5 $ 51.3 $ 459.9 $ 251.5 Stock-based compensation 8.8 9.2 8.2 36.9 31.7 Integration related costs 0.6 — 1.9 2.9 18.1 Amortization of acquired intangibles 19.3 19.0 22.1 82.2 83.9 Amortization of inventory fair value adjustments — — — — 8.3 Other charges, net (5) (7.0 ) (1.2 ) 2.1 (10.4 ) 16.6 Gross profit on non-GAAP basis $ 181.6 $ 149.5 $ 85.6 $ 571.5 $ 410.1 Gross margin on non-GAAP basis 37.8 % 35.2 % 27.8 % 34.7 % 30.2 % Research and development on GAAP basis $ 79.5 $ 75.9 $ 73.2 $ 303.9 $ 302.2 Stock-based compensation (11.4 ) (11.2 ) (8.0 ) (43.3 ) (38.1 ) Integration related costs — (0.3 ) — (0.3 ) (0.1 ) Amortization of acquired intangibles (0.4 ) (0.4 ) (0.4 ) (1.6 ) (1.5 ) Intangible assets write-off (0.1 ) (0.7 ) — (2.7 ) — Acquisition related costs — — — — (0.4 ) Other charges, net — — 0.1 — (1.1 ) Research and development on non-GAAP basis $ 67.6 $ 63.3 $ 64.9 $ 256.0 $ 261.0 Selling, general and administrative on GAAP basis $ 83.6 $ 112.0 $ 74.9 $ 348.2 $ 310.7 Stock-based compensation (2) (19.8 ) (42.4 ) (14.3 ) (97.0 ) (59.0 ) Acquisition related (costs) reversal (0.7 ) (0.5 ) 0.2 (1.2 ) (12.9 ) Integration related costs (0.7 ) (1.1 ) (2.2 ) (6.0 ) (8.8 ) Amortization of acquired intangibles (14.9 ) (15.0 ) (19.4 ) (65.9 ) (65.2 ) Other charges, net (5) (5.8 ) (12.9 ) (2.7 ) (22.7 ) (8.1 ) Selling, general and administrative on non-GAAP basis $ 41.7 $ 40.1 $ 36.5 $ 155.4 $ 156.7 Loss from operations on GAAP basis $ (8.4 ) $ (37.7 ) $ (133.4 ) $ (180.1 ) $ (434.0 ) Stock-based compensation (2) 40.0 62.8 30.5 177.2 128.8 Acquisition related costs (reversal) 0.7 0.5 (0.2 ) 1.2 13.3 Integration related costs 1.3 1.4 4.1 9.2 27.0 Amortization of acquired intangibles 34.6 34.4 41.9 149.7 150.6 Amortization of inventory fair value adjustments — — — — 8.3 Restructuring and related charges (3) 5.2 7.2 36.6 22.8 72.6 Intangible assets write-off 0.1 0.7 — 2.7 — Gain on sale of facility (4) — (34.9 ) — (34.9 ) — Other charges, net (5) (1.2 ) 11.7 4.7 12.3 25.8 Income (loss) from operations on non-GAAP basis $ 72.3 $ 46.1 $ (15.8 ) $ 160.1 $ (7.6 ) Operating margin (loss) on non-GAAP basis 15.0 % 10.8 % (5.1 )% 9.7 % (0.6 )% Interest and other income, net on GAAP basis $ (3.0 ) $ (1.5 ) $ 5.9 $ 8.0 $ 28.3 Foreign exchange losses (gains), net 5.8 3.6 (1.2 ) 4.2 (0.7 ) Non-cash interest expense on convertible notes and other expenses 0.7 0.8 0.7 3.0 14.9 Interest and other income, net on non-GAAP basis $ 3.5 $ 2.9 $ 5.4 $ 15.2 $ 42.5 Loss before income taxes on GAAP basis $ (11.4 ) $ (39.2 ) $ (127.5 ) $ (172.1 ) $ (405.7 ) Stock-based compensation (2) 40.0 62.8 30.5 177.2 128.8 Acquisition related costs (reversal) 0.7 0.5 (0.2 ) 1.2 13.3 Integration related costs 1.3 1.4 4.1 9.2 27.0 Amortization of acquired intangibles 34.6 34.4 41.9 149.7 150.6 Amortization of inventory fair value adjustments — — — — 8.3 Restructuring and related charges (3) 5.2 7.2 36.6 22.8 72.6 Gain on sale of facility (4) — (34.9 ) — (34.9 ) — Intangible assets write-off 0.1 0.7 — 2.7 — Foreign exchange losses (gains), net 5.8 3.6 (1.2 ) 4.2 (0.7 ) Non-cash interest expense on convertible notes and other expenses 0.7 0.8 0.7 3.0 14.9 Other charges, net (5) (1.2 ) 11.7 4.7 12.3 25.8 Income (loss) before income taxes on non-GAAP basis $ 75.8 $ 49.0 $ (10.4 ) $ 175.3 $ 34.9 Income tax provision (benefit) on GAAP basis $ (224.7 ) $ 4.9 $ 125.0 $ (198.0 ) $ 140.8 Non-GAAP income tax reconciling adjustments 237.2 3.2 (126.5 ) 226.9 (135.7 ) Income tax provision (benefit) on non-GAAP basis $ 12.5 $ 8.1 $ (1.5 ) $ 28.9 $ 5.1 Net income (loss) on GAAP basis $ 213.3 $ (44.1 ) $ (252.5 ) $ 25.9 $ (546.5 ) Stock-based compensation (2) 40.0 62.8 30.5 177.2 128.8 Acquisition related costs (reversal) 0.7 0.5 (0.2 ) 1.2 13.3 Integration related costs 1.3 1.4 4.1 9.2 27.0 Amortization of acquired intangibles 34.6 34.4 41.9 149.7 150.6 Amortization of inventory fair value adjustments — — — — 8.3 Restructuring and related charges (3) 5.2 7.2 36.6 22.8 72.6 Intangible assets write-off 0.1 0.7 — 2.7 — Gain on sale of facility (4) — (34.9 ) — (34.9 ) — Foreign exchange losses (gains), net 5.8 3.6 (1.2 ) 4.2 (0.7 ) Non-cash interest expense on convertible notes and other expenses 0.7 0.8 0.7 3.0 14.9 Other charges, net (5) (1.2 ) 11.7 4.7 12.3 25.8 Non-GAAP income tax reconciling adjustments (237.2 ) (3.2 ) 126.5 (226.9 ) 135.7 Net income (loss) on non-GAAP basis $ 63.3 $ 40.9 $ (8.9 ) $ 146.4 $ 29.8 Net income (loss) per share on non-GAAP basis $ 0.88 $ 0.57 $ (0.13 ) $ 2.06 $ 0.44 Shares used in per share calculation - diluted on GAAP basis 72.0 69.3 67.8 69.6 67.3 Non-GAAP adjustment (6) — 2.9 — 1.6 0.4 Shares used in per share calculation - diluted on non-GAAP basis 72.0 72.2 67.8 71.2 67.7 Expand (1) During the first quarter of fiscal year 2025, the Company refined its methodology to report non-GAAP financial measures. 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(5) Other charges, net for the three months ended June 28, 2025 mainly includes a credit of $5.2 million associated with indirect taxes reserve released due to the settlement of an audit, and a credit of $1.8 million related to units sold that were previously written down, offset by $5.7 million of legal and professional fees primarily related to non-ordinary course legal matters. Other charges, net for the twelve months ended June 28, 2025 mainly includes $12.2 million of legal and professional fees primarily related to non-ordinary course legal matters, $6.2 million of CEO transition costs, and $3.2 million of bad debt reserve related to the remaining unpaid balances due from Huawei associated with the trade restrictions, offset by a credit of $5.2 million associated with indirect taxes reserve released due to the settlement of an audit and a $5.0 million credit related to units sold that were previously written down. (6) The adjustment represents the dilutive impact of equity-based compensation awards in accordance with the treasury stock method and dilutive shares from our convertible debt instruments under the if-converted method. Expand Three Months Ended Twelve Months Ended June 28, 2025 March 29, 2025 June 29, 2024 (1) June 28, 2025 June 29, 2024 (1) GAAP net income (loss) $ 213.3 $ (44.1 ) $ (252.5 ) $ 25.9 $ (546.5 ) Interest and other income, net 3.0 1.5 (5.9 ) (8.0 ) (28.3 ) Income tax provision (benefit) (224.7 ) 4.9 125.0 (198.0 ) 140.8 Depreciation 26.4 25.0 28.2 104.3 110.6 Amortization of acquired intangibles 34.6 34.4 41.9 149.7 150.6 EBITDA 52.6 21.7 (63.3 ) 73.9 (172.8 ) Amortization of inventory fair value adjustments — — — — 8.3 Restructuring and related charges 5.2 7.2 36.6 22.8 72.6 Stock-based compensation 40.0 62.8 30.5 177.2 128.8 Acquisition related costs 0.7 0.5 (0.2 ) 1.2 13.3 Integration related costs 1.3 1.4 4.1 9.2 27.0 Intangible assets write-off 0.1 0.7 — 2.7 — Gain on sale of facility — (34.9 ) — (34.9 ) — Other charges, net (1.2 ) 11.6 3.2 12.1 17.9 Adjusted EBITDA $ 98.7 $ 71.0 $ 10.9 $ 264.2 $ 95.1 Expand (1) During the first quarter of fiscal year 2025, the Company refined its methodology to report non-GAAP financial measures. The change does not impact the Company's financial position, cash flows, or GAAP consolidated results of operations. Prior period non-GAAP financial measures presented in this press release have been recast to conform to the current presentation. Expand
