Wolfe Research on $LITE (Outperform, PT $1,200): "Bigger M&A Deals in Their Future? Lumentum included some additional language about potential M&A (i.e., new versus the 2025 10-K). Perhaps it suggests they could be looking to do bigger M&A deals? At the same time, we realize how hard it is to get M&A deals done. Nonetheless, investors might put these 10-K comments into their mosaic for the business going forward. Lots of New Manufacturing Capacity and Employees: At fiscal year-end, Lumentum had 13,757 full-time employees, up 30% from 10,562 a year earlier. Manufacturing roles accounted for 11,916 jobs (87% of total, versus 82% prior), up 37% Q/Q. Interestingly, they also sold two buildings at their San Jose headquarters to Super Micro—strange for a company growing as fast as Lumentum. Speaking with the company, we understand that CEO Michael Hurlston has been very fixated on the cost structure; they were able to consolidate all their employees into a single building. We haven't visited their HQ facilities in a little while, but we understand that it's jam-packed now. Shareholders should like their focus on cost efficiency. Purchase Obligations Growing Fast: Total year-end purchase obligations came in at $2.596B ($2.354B less than one year), up 45% Y/Y. The metrics are interesting and consistent with a business that's growing dramatically. We continue to like the risk/reward in the shares." Analyst: George Notter