Chart 03 — GAAP vs Non-GAAP EPS

Two Scorecards, One Business

Diluted EPS: GAAP (reported) vs Non-GAAP (adjusted) · Q1 FY2025 to Q3 FY2026
What is GAAP EPS?
The legally mandated reported number. Includes all costs — including non-cash charges like amortisation of acquired intangibles and stock-based compensation.
What is Non-GAAP EPS?
Management's preferred view — strips out non-cash charges to show the underlying operating performance. Not audited, but widely used in tech hardware analysis.
⚠ The Gap: Why It Exists Here
Lumentum acquired NeoPhotonics (~$918M, 2022) and CloudLight (~$750M, 2023). These generate ~$200M+/year in amortisation charges that show up in GAAP but not Non-GAAP. The cash is not actually leaving the business every quarter.
Source: Lumentum Holdings SEC Filings & Earnings Releases. Non-GAAP EPS excludes: stock-based compensation, amortisation of acquired intangibles, restructuring charges, and certain tax adjustments. Q3 FY26 Non-GAAP EPS = $2.37 (reported).
CURIOUS INVESTING INSIGHTS