10-Q · May 6, 2026
Coherent Corp reported Q3 2026 results with revenues of $1.806 billion, a significant increase of 21% from $1.498 billion in Q3 2025. The company generated a net income of $182 million, or $0.97 per diluted share,…
Earnings analysis · 10-K
COHR earnings analysis
Filed August 14, 2026 · Our reading of the company's report
The latest report
Coherent’s fiscal 2026 results show a strong AI-optics-led inflection: revenue rose 23% to $7.118 billion, gross margin reached 37%, and diluted EPS recovered to $4.12. Datacenter & Communications is the clear growth…
Read full summary
Coherent’s fiscal 2026 results show a strong AI-optics-led inflection: revenue rose 23% to $7.118 billion, gross margin reached 37%, and diluted EPS recovered to $4.12. Datacenter & Communications is the clear growth engine, while the NVIDIA agreement and capacity investments support an ambitious product and manufacturing roadmap. However, operating cash flow dropped to $80 million amid inventory investment, and the Huawei inquiry, rising customer concentration and substantial purchase commitments create meaningful execution and regulatory risks.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $4.12
- Gross margin
- 37%
What stood out
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AI optics platform is driving growth
Coherent describes its photonic technology platform as foundational to AI datacenter performance and scalability. Fiscal 2026 Datacenter & Communications revenue increased 40% to $5.275 billion, driven primarily by AI datacenter demand and transceivers.
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NVIDIA agreement strengthens positioning
The NVIDIA agreement includes a multi-billion-dollar purchase commitment and future access and capacity rights for advanced laser and optical networking products. NVIDIA also invested $2 billion in Coherent on March 2, 2026.
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Two years of strong financial inflection
Revenue increased 23% to $7.118 billion in fiscal 2026, following 23% growth to $5.810 billion in fiscal 2025 from $4.708 billion in fiscal 2024. Gross margin expanded from 31% in fiscal 2024 to 35% in fiscal 2025 and 37% in fiscal 2026.
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Earnings returned to profitability
Diluted EPS improved to $4.12 in fiscal 2026 from a loss of $0.52 in fiscal 2025 and a loss of $1.84 in fiscal 2024. The improvement was supported by $124 million of gains on business sales and a reduction in interest and other expense from $196 million to $50 million.
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Product roadmap prioritizes high-value optics
The company is investing in Transceivers, co-packaged optics, optical circuit switches and Multi-rail solutions. R&D increased to $723 million in fiscal 2026 from $582 million in fiscal 2025, remaining 10% of revenue.
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Capacity investment paired with deleveraging
Capital spending increased sharply to $1.103 billion from $441 million in fiscal 2025, while the company reduced total debt obligations to $3.222 billion from $3.687 billion and made $509 million of payments on its Term Facilities.
What to watch
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Huawei export-control inquiry
The company disclosed a January 2025 BIS inquiry into past product sales to Huawei, has stopped shipping products to Huawei, and cannot estimate a potential loss. It stated that violations of export regulations could result in significant penalties, costs or expenses.
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Customer concentration and capacity risk
The NVIDIA capacity agreement may require material future investments in equipment, labor and working capital through 2030. One major customer represented 20% of fiscal 2026 revenue, up from 10% in each of the prior two years, increasing customer-concentration and execution risk.
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Cash conversion and commitments
Operating cash flow fell to $80 million from $634 million in fiscal 2025, primarily because inventory increased by $1.183 billion to support growth. The company also reported $11.8 billion of estimated vendor purchase commitments, including $3.4 billion due in fiscal 2027.
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Lasers goodwill has limited headroom
The Lasers reporting unit had approximately $3.1 billion of goodwill, while estimated fair value exceeded carrying value by only approximately 8% as of April 1, 2026. Management used an 11.0% discount rate and warned that materially weaker results could trigger a future impairment charge.
Management's outlook
The 10-K does not provide quantitative annual guidance; near-term outlook was deferred to the Q4 earnings release and call.
Earlier filings 4
10-Q · November 5, 2025
Coherent reported a strong quarter: revenues of $1,581,378,000 (up from $1,348,135,000 a year ago) and diluted EPS of $1.19 versus $(0.04) in the prior-year period. Datacenter & Communications led the expansion (to…
10-K · August 15, 2025
Coherent reported fiscal 2025 revenue of $5.810 billion, a 23% increase year-over-year driven by strong AI datacenter demand in its Networking/datacom business. Gross margin expanded to 35% (up 424 bps) and segment…
10-K · August 18, 2023
Coherent’s FY2023 results reflect the transformational acquisition of Legacy Coherent (closed July 1, 2022) which drove consolidated revenue to $5,160.1M (up 56% from $3,316.6M in FY2022) but produced a FY2023 net loss…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.