erent (COHR) - 2025 Q2 - Quarterly Report

Financial Performance - Total revenues for the three months ended December 31, 2024 increased 27% to $1,435 million, compared to$1,131 million for the same period last fiscal year [112]. - Revenues for the six months ended December 31, 2024 increased 27% to $2,783 million, compared to$2,185 million for the same period last fiscal year [115]. - Networking revenues increased 56% year-over-year due to strong AI datacenter demand and recovery in telecom [114]. - Lasers revenue increased 6% year-over-year, reflecting strong demand in display capital equipment and semiconductor capital equipment [114]. - Materials revenues decreased 4% year-over-year, primarily due to weak automotive end market demand [114]. - Networking segment revenues for the three months ended December 31, 2024 increased 56% to $816 million, compared to$524 million for the same period last fiscal year [127]. - Materials segment revenues for the three months ended December 31, 2024 decreased 4% to $243 million, compared to$254 million for the same period last fiscal year [129]. - Lasers segment revenues for the three months ended December 31, 2024 increased 6% to $375 million, compared to$354 million for the same period last fiscal year [132]. Profitability and Expenses - Gross margin for the three months ended December 31, 2024 was $509 million, or 36$144 million, or 10% of revenues, compared to $111 million, or 10$221 million, or 15% of revenues, down from $209 million, or 18$153 million, compared to $95 million for the same period last fiscal year [128]. Restructuring and Synergies - The restructuring plan approved on May 23, 2023 resulted in charges of$8 million for the three months ended December 31, 2024, primarily for site move costs and employee termination costs [107]. - The company achieved its previously announced $250 million synergy plan, which includes savings from supply chain management and operational efficiencies [108]. - Restructuring charges for the three and six months ended December 31, 2024 were$8 million and $32 million, respectively, compared to a net recovery of$2 million and net charges of $1 million for the same periods in 2023 [119]. - The company expects restructuring actions to be substantially completed by the end of fiscal 2025 [107]. Cash Flow and Debt - Net cash provided by operating activities was$340 million for the six months ended December 31, 2024, compared to $266 million for the same period last fiscal year [137]. - Net cash used in investing activities was$172 million for the six months ended December 31, 2024, compared to $156 million for the same period last fiscal year [138]. - Net cash used in financing activities was$266 million for the six months ended December 31, 2024, compared to net cash provided of $859 million for the same period last fiscal year [139]. - As of December 31, 2024, total debt obligations amounted to$3.86 billion, down from $4.1 billion as of June 30, 2024 [142]. - The company made payments of$248 million for the Term Facilities during the six months ended December 31, 2024, including voluntary payments of $215 million [142]. - The company received$1.0 billion in exchange for 25% equity of Silicon Carbide LLC, aimed at funding future capital expansion [143]. - As of December 31, 2024, the company held approximately $783 million of cash, cash equivalents, and restricted cash outside the United States [145]. - The company believes existing cash, cash flow from operations, and available borrowing capacity will be sufficient to fund its needs for at least the next twelve months [144]. Interest and Taxation - Interest and other, net for the three months ended December 31, 2024 was an expense of$8 million, a decrease of $61 million from$69 million for the same period last fiscal year [121]. - The effective income tax rate for the year-to-date at December 31, 2024 was 14%, down from 24% for the same period in 2023 [122]. - The company incurred interest expenses of $52 million and$106 million for the three and six months ended December 31, 2024, respectively [141]. - The interest rate cap reduced interest expense by $7 million and$21 million for the three and six months ended December 31, 2024, respectively [141]. - A change in interest rates of 100 basis points on variable rate borrowings would have resulted in additional interest expense of $8 million and$16 million for the three and six months ended December 31, 2024, respectively [148]. Risk Management - The company paused its balance sheet hedging program indefinitely as of September 30, 2024, while continuing to analyze foreign exchange risks [147].