Coherent, Inc. Q1 2027 Earnings Recap

Coherent shares fell 13.0% after earnings. Despite rapid growth and upbeat long-term demand commentary, investors may have focused on the fact that PhotonLink revenue is expected to begin ramping in early calendar 2028, while the transcript offers no near-term relief from the company’s reliance on data center demand.

Key Takeaways

• Q1 revenue rose 16% sequentially and 56% year over year on a pro forma basis; non-GAAP EPS increased 80% year over year.
• Data center and communications revenue grew 79% year over year and now represents 82% of total revenue. Data center revenue rose 85% year over year.
• Management expects full-year pro forma revenue growth to exceed 60% and says the company remains on track for its first $3 billion revenue quarter by fiscal year-end.
• PhotonLink revenue is expected to exceed $100 million in the March quarter, but the newly signed $20 billion, five-year LTA is expected to start generating revenue in early calendar 2028.
• The company cited exceptional order coverage through calendar 2027, with customer orders increasingly extending into 2028; it also expects 1.6T transceiver revenue to ramp rapidly over coming quarters.