Coherent, Inc. Q2 FY2026 Earnings Call

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Coherent Q2 FY2026 Earnings Summary

  • Revenue: Record $1.69B, +7% sequentially (from Q1 FY2026) and +17% year-over-year. Pro forma (excl. divested Aerospace & Defense business): +9% seq and +22% YoY.
  • Non-GAAP Gross Margin: 39%, +24 bps sequentially and +77 bps YoY (from Q2 FY2025).
  • Non-GAAP EPS: $1.29, +11% sequentially (from $1.16 in Q1) and +35% YoY (from $0.95 in Q2 FY2025).
  • Non-GAAP Operating Margin: 19.9%, up from 19.5% prior quarter and 18.5% YoY.
  • Debt Leverage: 1.7x (improved from 2.3x YoY).

Segment Performance

  • Data Center & Communications (70%+ of revenue): +11% seq / +34% YoY. Data center sub-segment: +14% seq / +36% YoY (acceleration driven by 800G and 1.6T transceivers). Communications: +9% seq / +44% YoY (strong DCI and traditional telecom).
  • Industrial: +4% seq / flat YoY (pro forma, excl. A&D divestiture). Sequential growth from industrial lasers and engineered materials.

Key Business Highlights & Capacity Updates

  • Data center bookings: Book-to-bill >4x; most CY2026 revenue already booked, with CY2027 filling rapidly. Strong demand for 800G/1.6T, OCS, and CPO.
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Operator: Greetings, and welcome to the Coherent Quarter Fiscal Year 2026 Earnings Call. It is now my pleasure to introduce your host, Mr. Paul Silverstein, Senior Vice President of Investor Relations for Coherent. Please go ahead. Paul Silverstein: Thank you, operator, and good afternoon, everyone. With me today are James Anderson, Coherent's CEO, and Sherri Luther, Coherent's CFO. During today's call, we will provide a financial and business review of 2026 and the business outlook for 2026. Our earnings press release can be found in the Investor Relations section of our company website at coherent.com. I would like to remind everyone that during our conference call, we may make projections or other forward-looking statements regarding future events and the future financial performance of the company. We caution you that such statements or predictions are based on information that is currently available and that actual results may differ materially. We refer you to the documents that the company files with the SEC, including our 10-Ks, 10-Qs, and 8-Ks. These documents contain and identify important risk factors that could cause the actual results to differ materially from those contained in the projections or forward-looking statements. This call includes and constitutes the company's official guidance for 2026. If at any time after this call, we communicate any material changes to this guidance, we intend that such updates will be done using a public forum such as a press r
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