Coherent's Fourth-Quarter Sales Growth Accelerates
Fourth-quarter revenue reached $2.05 billion, up 33.8% from a year earlier, and the company guided first-quarter fiscal 2027 sales to $2.2 billion to $2.4 billion.
Coherent Corp. (COHR), a global photonics company, reported fourth-quarter fiscal 2026 revenue of $2.05 billion, up 33.8% from a year earlier, after 20.5% growth in the March quarter and 17.5% in the December quarter.
The sequential step-up was 13.3% from $1.81 billion in the prior quarter, after a 7.1% sequential increase in the March period. Chief Executive Jim Anderson said fiscal 2026 brought record revenue, significant margin expansion, and non-GAAP earnings growth more than twice the rate of revenue growth. He said the company enters fiscal 2027 with exceptional customer demand, expanding production capacity, and multiple new growth platforms beginning to ramp, and that as AI datacenter architectures shift from copper to optical connectivity, Coherent’s photonic portfolio and manufacturing scale position it for a multiyear opportunity.
GAAP gross margin expanded 277 basis points year over year to 38.5%, after a 243-basis-point year-over-year increase in the prior quarter. Non-GAAP gross margin was 40.2%, up 215 basis points from a year earlier, after a 105-basis-point year-over-year increase in the March quarter. Chief Financial Officer Sherri Luther said strong operational execution drove meaningful gross margin expansion and converted top-line growth into GAAP and non-GAAP earnings growth.
GAAP diluted earnings were $1.19 a share, up $2.02 from a $0.83 loss a year earlier. Non-GAAP diluted earnings were $1.74 a share, up $0.74 from a year earlier. GAAP operating income was $254 million and operating margin 12.4%, versus $6 million and 0.4% a year earlier. Non-GAAP operating income was $446 million and operating margin 21.8%, versus $275 million and 18.0% a year earlier. GAAP selling, general and administrative expense was 13.0% of revenue, down 302 basis points from a year earlier; non-GAAP SG&A was 8.2%.
Datacenter & Communications revenue was $1.62 billion, up from $1.02 billion a year earlier. Industrial revenue was $431 million, down from $511 million a year earlier. Datacenter & Communications revenue rose 18.6% sequentially to $1.62 billion from $1.36 billion in the March quarter, while Industrial revenue declined 3.0% sequentially to $431 million from $444 million.
GAAP restructuring charges were $6.1 million in the June quarter, down from $34.4 million in the March quarter. Impairment of assets held for sale was $44.3 million, versus none in the March quarter.
For the full year ended June 30, 2026, revenue was $7.12 billion, up 22.5% from $5.81 billion a year earlier. GAAP net earnings attributable to Coherent were $805 million, or $4.12 a share, versus $49 million, or a $0.52 loss a share, a year earlier. Non-GAAP net earnings were $1.10 billion, or $5.61 a share.
Cash and cash equivalents were $1.16 billion at June 30, 2026. Inventories were $2.58 billion. Property, plant and equipment, net, was $3.00 billion. Long-term debt was $3.21 billion. For the year, additions to property, plant and equipment were $1.10 billion, versus $441 million a year earlier. Net cash provided by operating activities was $80 million.
Revenue for the first quarter of fiscal 2027 is expected to be between $2.2 billion and $2.4 billion. Non-GAAP gross margin is expected to be between 39.5% and 41.5%. Non-GAAP operating expenses are expected to be between $400 million and $420 million. Non-GAAP earnings are expected to be between $1.85 and $2.05 a share. Luther said the company remains disciplined in capital allocation, prioritizing investments to expand manufacturing capacity to fulfill the ongoing acceleration in customer demand.