Coherent Corp. (COHR) Shares Surge on Strong Q2 Results

Coherent Corp. (COHR) shares traded over 17.3% higher on Thursday, February 7, 2025, following the company's announcement of better-than-expected second-quarter fiscal 2025 results. The strong performance was driven by robust growth in AI-related data center demand and the telecom business, as well as improved margins and a positive outlook for the third quarter.



Coherent reported sales of $1.44 billion, surpassing the consensus estimate of $1.37 billion, and adjusted EPS of $0.95, which exceeded the consensus of 69 cents. The company's adjusted gross margin expanded by 363 basis points year-over-year (YoY) to 38.2%, and adjusted operating income surged by 73.8% YoY to $265 million. As of December 31, 2024, Coherent's cash and cash equivalents stood at $917.8 million, with the company paying down $132 million of its outstanding debt during the quarter.

Coherent's CEO, Jim Anderson, attributed the strong growth to another quarter of robust AI-related data center demand and growth in the telecom business. The company's focus on these high-growth markets has driven record revenue and margin expansion. Coherent's positive outlook for the third quarter of fiscal 2024, with forecasted revenue of $1.39 billion-$1.48 billion and adjusted EPS of $0.75-$0.95, further supports the stock price increase.



Coherent's recent product innovations, such as the new high-power F-Theta lens for additive manufacturing and EV battery welding, and the CT-Series thermoelectric coolers for enhanced thermal management, have also contributed to its strong financial performance and market growth. These innovations have expanded the company's reach in various industries, driving revenue growth and improved margins.



In conclusion, Coherent Corp.'s (COHR) significant stock price increase on Thursday, February 7, 2025, was driven by strong second-quarter fiscal 2025 results, robust growth in AI-related data center demand and the telecom business, improved margins, and a positive outlook for the third quarter. The company's focus on high-growth markets and recent product innovations have contributed to its record revenue and margin expansion, making Coherent an attractive investment opportunity.