Shares of Lumentum Holdings Inc. (NASDAQ: LITE) surged 5.34% in after-hours trading on Tuesday, following the company's release of better-than-expected first-quarter fiscal 2026 results and an optimistic forecast for the upcoming quarter.

The optical and photonic products manufacturer reported Q1 adjusted earnings per share of $1.10, surpassing analysts' estimates of $1.03. Revenue for the quarter came in at $533.8 million, exceeding expectations of $525.4 million and representing a substantial 58.4% year-over-year increase.

Lumentum's strong performance was driven by robust demand in key markets. Alan Lowe, President and CEO of Lumentum, commented: "We delivered strong first quarter results with revenue and non-GAAP EPS above the guidance range. Our performance was driven by robust demand in data center, data center interconnect, and long-haul markets, coupled with operational improvements that expanded our non-GAAP operating margin by more than 1,500 basis points year-over-year."

The company's outlook for the second quarter further fueled investor optimism. Lumentum projects Q2 revenue between $630 million and $670 million, with non-GAAP diluted earnings per share expected to range from $1.30 to $1.50. Additionally, the company anticipates a non-GAAP operating margin of 20.0% to 22.0% for Q2, reflecting continued operational efficiencies.

Lumentum's focus on high-growth areas such as optical circuit switches, co-packaged optics, and cloud transceivers appears to be resonating well with the market. The company's ability to capitalize on the increasing demand for advanced optical solutions in data centers and telecommunications infrastructure has positioned it for continued growth in the coming quarters.