Co-packaged optics is transitioning from concept to concrete demand, with Lumentum moving CPO into contracted pipeline and backlog. Management disclosed a multi-hundred-million-dollar purchase order for delivery in the first half of 2027 and outlined first scale-up shipments by late 2027.

Order backlog for optical circuit switches has surged past $400 million with the majority scheduled for shipment in the second half of 2026, while the new CPO order adds further visibility into first-half 2027 deployments. This combined backlog supports multi-year capacity planning, product qualification and customer diversification in next-generation AI systems.

For Q3, Lumentum guided revenue of $780 million to $830 million, with a midpoint of $805 million representing an all-time quarterly high, and earnings of $2.15 to $2.35 per share. This guidance underscores strong demand execution in high-value optics and optical circuit switch products.

Lumentum is evaluating external light source modules that could boost per-system revenue content by roughly 2.0x to 2.5x compared to lasers alone. This initiative aims to expand the addressable value pool as AI architectures increasingly favor optics over copper for short-reach connections.