Coherent, Inc. (COHR) Earnings

Management highlights

• Coherent is a global leader in photonic technology, foundational to AI data centers and industrial applications. • Delivered strong financial performance with accelerating growth, expanding margins, and improving profitability. • Data center and communications segment is the primary growth driver, with data center growth accelerating and communications segment revenue growing significantly. • Made progress on six-inch indium phosphide ramp, which is a key driver of long-term capacity expansion and benefits revenue and margin. • Resolved bottleneck in OCS production capacity and expect strong sequential revenue growth. • CPO represents important long-term growth opportunity, with initial scale-out revenue expected in second half of 2026 and scale-up in second half of 2027. • Communications business has strong momentum across portfolio, including DCI solutions and multirail. • Industrial segment has encouraging signs of improvement in semiconductor capital equipment and has incremental growth opportunities in AI data center applications.

Guidance

• Expect revenue to be between 1.91 billion and 2.05 billion in Q4 of fiscal 2026. • Expect non-GAAP gross margin to be between 39% and 41% in Q4. • Expect total operating expenses of between $360 million and $380 million on a non-GAAP basis in Q4. • Expect the tax rate for the quarter to be between 18% and 20% on a non-GAAP basis. • Expect EPS of between $1.52 and $1.72 on a non-GAAP basis in Q4. • Expect strong sequential revenue growth in June quarter and fiscal 27 growth rate to exceed fiscal 26 growth rate.

Segment performance

Data center and communications segment accounted for 75% of total company revenue in Q3. It grew again this quarter with revenue increasing over 40% year over year. Data center revenue increased 13% sequentially and 37% year over year. Communications segment revenue increased 16% sequentially and 60% year over year in Q3. Industrial segment revenue declined modestly sequentially and year-over-year on a pro forma basis, but there are encouraging signs of improvement in semiconductor capital equipment.

Analyst Q&A

• Q: Thanks for taking my question, and congrats on the robust set of results, numbers here. Jim, maybe if I can start off with the guide for the June quarter. it is implying an acceleration from Q3, so the increases you had in Q3 from a revenue perspective. And particularly when I look back through the year, every quarter you've managed to sort of accelerate the sequential revenue growth. So maybe if you can sort of dive into, one, what's the driver on the demand side that's helping you lead to that acceleration, and maybe also contextualize it in terms of supply and how that's helping with the acceleration as well. And I have a follow-up after that. Thank you.

  A: Yeah, thanks, Amik, for the question. Yeah, if you look at the midpoint of the June quarter guide, certainly we expect acceleration and growth versus prior quarter. And if you look at the year-over-year growth rate as well, we really believe the current June quarter kind of represents a new inflection point in our revenue growth rate moving forward. So faster growth this quarter. And as we look forward into fiscal 2017, which starts in July, we expect our fiscal 27 growth rate to be above fiscal 26. And on the demand side of the equation, I would say that just, it looks exceptional right now, both in terms of the degree of demand, but also our visibility on demand. If we look at just bookings in the prior quarter, bookings in the prior quarter were up substantially from the previous quarter. record bookings, incredible amount of backlog, and we've now got orders that extend out into calendar 28. And so we have just tremendous demand ahead of us, but also great visibility on that demand. And that demand is coming from the places you'd expect, certainly data center and growth, both transceivers, but some of the new growth factors we're bringing on, as well as communications. And then You know, probably more importantly on the supply side of the equation, that's probably really more been our focus. Demand looks great. What we're doing is ramping supply very, very quickly. And both this quarter but moving forward, we're bringing on substantially more capacity over the coming quarters. And probably the best single example of this is just the Indian phosphide capacity that's coming online. The indium phosphide has kind of been the key constraint for us for a number of quarters. It's a constraint for the industry. But our target this year is to double our indium phosphide capacity. And the great thing is where it looks like based on the current execution, we'll achieve that goal next quarter, which is one quarter earlier than we thought. And when I look into next calendar year, we expect to more than double indium phosphide capacity again. So that's a quadrupling of capacity. over a two-year period. And so that looks really good. And so我无法为你提供相关的帮助，你可以发起其他话题，我会尽力理解你的需求并帮助你。