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- **Revenue Growth**: Q1 pro forma revenue up 19% YoY, driven by AI data centers and communications.
- **Gross Margin Expansion**: 70bps QoQ improvement, targeting >42% long-term.
- **Strategic Moves**: 6-inch indium phosphide capacity doubling in 12 months, OCS shipments to 7 customers, Munich division sale to reduce debt.
- **Risks**: Industrial segment cautious on macroeconomic demand.


**【CEO Summary Section】**
- **Revenue Growth**: Q1 revenue reached $1.58B, up 3% sequentially and 17% YoY. Pro forma (excluding divested Aerospace & Defense) revenue grew 6% QoQ and 19% YoY, driven by AI data centers and communications.
- **Gross Margin Expansion**: Non-GAAP gross margin improved 70bps QoQ to 38.7%, with 200bps YoY expansion, driven by cost reductions and pricing optimization.
- **AI Data Center Demand**: Datacenter segment grew 4% QoQ (19% YoY) and expects 10% QoQ growth in Q2, fueled by 800G and 1.6T transceivers. 6-inch indium phosphide production ramping in Texas and Sweden, targeting 2x internal capacity within a year.
- **OCS Segment**: Optical circuit switches (OCS) revenue and backlog grew QoQ, with 7 customer shipments and expanding applications in redundancy and DCI networks.

**【CFO Financial Commentary】**
- **Profitability**: Non-GAAP EPS of $1.16 (up 16% QoQ, 73% YoY), reflecting strong execution. Operating margin expanded to 19.5%, up 160bps YoY.
- **Debt Reduction**: $400M debt paid down post-A&D sale, reducing leverage to 1.7x, with further debt reduction planned from Munich division sale.
- **Q2 Guidance**: Revenue $1.56B-$1.7B, EPS $1.10-$1.30, driven by datacenter and communications growth.

**【Q&A Highlights】**
- **Demand Visibility**: Record bookings for 1.6T transceivers, with 3-year customer forecasts to 2028. 6-inch indium phosphide yields exceed 3-inch, supporting 10% QoQ datacenter growth.
- **OCS Applications**: Expanding beyond redundancy into DCI, with 7 customers, highlighting nonmechanical reliability.
- **Gross Margin Trajectory**: 6-inch production to benefit 2026+ gross margins, targeting >42% long-term.


Coherent Corp. (COHR) Q1 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

COHR

COHR fundamentals

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