Coherent, Inc. Earnings Recaps
Q3 2026
May 8, 2026
Coherent’s shares fell 4.9% post-earnings as investors reacted negatively to a cautious outlook on near-term capacity constraints and supply chain issues, despite strong demand and record backlog levels. Concerns around production bottlenecks and margin risks overshadowed the solid revenue growth.
Key takeaways
- Revenue increased 9% sequentially and 27% year-over-year, showing accelerating growth momentum.
- Datacenter & Communications segment, representing 75% of revenue, grew over 40% year-over-year, with data center sales alone up 37% year-over-year and 13% sequentially.
- Gross margins expanded both sequentially and year-over-year, aided by the ramp of 6-inch indium phosphide production lines.
- Production constraints remain a key challenge; the company only recently resolved bottlenecks in optical circuit switch (OCS) capacity and expects capacity growth to lag demand in the near term.
- Management pushed back the long-term capacity ramp by at least a quarter and underscored the criticality of supply chain execution to realize backlog and revenue growth, prompting investor caution.
Q2 2026
Feb 5, 2026
Coherent reported a robust fiscal Q2 2026 with a 22% year-over-year revenue increase, driven by exceptional demand for photonic technology in data centers and communications sectors, alongside significant improvements in profit margins.
Key takeaways
- Revenue rose 9% sequentially and 22% year-over-year, excluding divested segments.
- Non-GAAP EPS grew 11% sequentially and 35% year-over-year, reflecting effective cost management and operational leverage.
- Data center revenue surged 14% sequentially and 36% year-over-year, propelled by innovative 800 gig and 1.6 T transceivers.
- Record bookings in the data center segment resulted in a book-to-bill ratio exceeding 4x, indicating strong future demand visibility.
- Expansion of indium phosphide production is on track to double by Q4, enhancing operational capabilities and cost efficiencies.