01—Abstract
Summary
Summary of the 10-Q filed May 6, 2026. Cited figures are marked; the original filing is the authoritative source.
Coherent Corp. reported strong performance for the nine months ended March 31, 2026, with revenues up 19% to $5.07 billiona, driven primarily by a 34% surge in its Datacenter & Communications segment.
This growth was fueled by robust demand for AI datacenters and optical networking solutions. The company also saw a significant improvement in profitability, with diluted EPS rising to $2.92b from $0.30 in the prior year's comparable period.
This enhanced profitability was supported by a higher gross margin of 37%c (up from 35%), driven by cost reductions, efficiency gains, and pricing optimization, particularly within the Datacenter & Communications segment. Despite a decrease in the Industrial segment's revenue due to divestitures, the overall financial health of Coherent Corp. appears robust, bolstered by strategic investments and a strong demand environment in its key markets.
02—Key points
Key Highlights
- Revenue for the nine months ended March 31, 2026, increased by 19% to $5.07 billion compared to the prior year's comparable period.
- The Datacenter & Communications segment experienced substantial revenue growth of 34% year-over-year, reaching $3.66 billion, driven by AI datacenter demand and optical networking solutions.
- Gross margin improved to 37% for the nine months ended March 31, 2026, up from 35% in the prior year, reflecting cost efficiencies and pricing strategies.
- Diluted earnings per share (EPS) significantly increased to $2.92 for the nine months ended March 31, 2026, compared to $0.30 in the prior year.
- Coherent Corp. secured a strategic agreement with NVIDIA, including a multi-billion dollar purchase commitment and a $2 billion equity investment, to advance optics technologies and support AI infrastructure.
- Despite revenue declines in the Industrial segment due to divestitures, the overall company performance shows strong top-line and bottom-line growth.
- The company's liquidity remains strong, with $1.59 billion in cash and cash equivalents and $825 million in short-term investments as of March 31, 2026.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed May 6, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $1.81B$1.50B | +20.5% |
| Cost of Revenue | $1.13B$970.19M | +16.0% |
| Gross Profit | $679.95M$527.69M | +28.9% |
| R&D Expenses | $185.99M$150.73M | +23.4% |
| SG&A Expenses | $267.64M$231.44M | +15.6% |
| Operating Expenses | $1.62B$1.49B | +9.0% |
| Net Income | $191.40M$15.71M | +1118.3% |
| EPS (Basic) | $1.01$-0.11 | +1018.2% |
| EPS (Diluted) | $0.97$-0.11 | +981.8% |
| Shares Outstanding (Basic) | 190.22M155.18M | +22.6% |
| Shares Outstanding (Diluted) | 196.37M155.18M | +26.5% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Coherent Corp.'s revenue growth in the nine months ended March 31, 2026?
Revenue growth was primarily driven by the Datacenter & Communications segment, which saw a 34% increase. This surge was fueled by strong demand for AI datacenters and optical networking solutions, including data center interconnect, scale across, and traditional telecom applications.
How has Coherent Corp.'s profitability improved?
Profitability has significantly improved, evidenced by a rise in diluted earnings per share to $2.92 for the nine months ended March 31, 2026, up from $0.30 in the prior year. This is supported by an expansion in gross margin to 37% from 35%, attributed to cost reductions, manufacturing efficiencies, yield improvements, and pricing optimization, especially in the Datacenter & Communications segment.
What is the significance of the NVIDIA agreement for Coherent Corp.?
The strategic agreement with NVIDIA, including a multi-billion dollar purchase commitment and a $2 billion equity investment, is highly significant. It validates Coherent's technology and market position, provides substantial capital for R&D and capacity expansion, and is expected to support the development of next-generation AI infrastructure and advanced optics technologies.
What impact have the divestitures in the Industrial segment had on the company's performance?
The divestitures of the aerospace and defense business and the Munich, Germany business led to a revenue decrease of 8% in the Industrial segment for the nine months ended March 31, 2026. However, the overall company performance remains strong due to robust growth in the Datacenter & Communications segment and improved gross margins, indicating effective management of the portfolio.
06—Continue