Core Insights - Coherent Corp. will participate in a fireside chat at the Morgan Stanley 2026 Technology, Media & Telecom Conference on March 3, 2026, at 2:35 p.m. PST [1][2] - The event will feature CEO Jim Anderson and CFO Sherri Luther, and a live and recorded audio webcast will be available on the company's investor relations website [1][2] Company Overview - Coherent is recognized as a global leader in photonics, providing technology solutions that drive innovation across various industries, including datacenter, communications, and industrial markets [3] - Founded in 1971, Coherent operates in over 20 countries and offers a comprehensive technology stack, strong supply chain resilience, and global scale to address complex technology challenges for its customers [4]

Core Insights - Coherent Corp. (COHR) is trading at a forward 12-month price-to-earnings ratio of 37.86X, significantly higher than the industry average of 22.26X, indicating a premium valuation despite strong operational performance [1][7] - In Q2 of fiscal 2026, COHR's non-GAAP EPS increased by 35.8% year-over-year to $1.29, outpacing the 17.5% revenue growth, showcasing substantial operating leverage [1][7] - The company has a book-to-bill ratio exceeding 4X in its data center segment, reflecting strong demand and visibility for future growth, particularly linked to AI infrastructure spending [3][7] Valuation Metrics - COHR's forward 12-month price-to-sales ratio stands at 5.83X, well above the industry's 2.57X, attributed to over 70% of revenue coming from the Datacenter & Communications segment [3] - The company's total debt to total capital ratio improved to 27.4% in Q2 of fiscal 2026, down from 41.1% in the same quarter last year, indicating effective balance sheet management [4] - Despite high valuation multiples, the strong margins and backlog suggest that the AI premium is justified by operational efficiency rather than speculation [5] Competitive Positioning - Compared to major competitors, Coherent is trading at a lower valuation; IPG Photonics is at 70.02X and Lumentum at 56.33X forward 12-month price-to-earnings [6] - Over the past six months, COHR's stock has surged by 174.2%, outperforming the industry which saw a 2.2% decline, although it lagged behind Lumentum's 441% increase [9] Earnings Estimates - The Zacks Consensus Estimate for COHR's earnings for fiscal 2026 and 2027 has risen by 5.5% and 13.1%, respectively, over the past 60 days [12] - COHR currently holds a Zacks Rank 2 (Buy), indicating positive market sentiment towards the stock [12]

Core Viewpoint - Coherent Corp. will host a Technology Innovation Briefing at the 2026 Optical Fiber Communication Conference and Exhibition, showcasing its leadership in photonics and innovation in the industry [1][2]. Event Details - The Technology Innovation Briefing is scheduled for March 17, 2026, at 4:00 p.m. ET at the Omni Los Angeles Hotel [2]. - The event will include presentations and a Q&A session featuring key executives: CEO Jim Anderson, CTO Dr. Julie Eng, EVP Semiconductor Devices Dr. Beck Mason, and CMO Dr. Sanjai Parthasarathi [2]. Presentation Format - Presentations will be delivered both in person and via live webcast, with the archived version available later the same day on Coherent's Investor Relations website [3]. Company Overview - Coherent is recognized as a global leader in photonics, providing technology solutions for datacenter, communications, and industrial markets [4]. - Established in 1971, Coherent operates in over 20 countries and offers a comprehensive technology stack and resilient supply chain to address complex technology challenges [4].

Core Insights - Coherent Corp. is participating in the Optica Executive Forum at OFC 2026, focusing on advancements in optical networking and communications [1][5] - The company's executives will engage in discussions about the evolving role of optics in next-generation networks and AI-driven infrastructure [2][5] Executive Participation - CEO Jim Anderson will be a panelist on the CEO Panel, discussing the role of optics in future networks [2] - CTO Dr. Julie Eng will participate in a fireside chat, sharing insights on Coherent's technology roadmap and innovation priorities [3] - CMO Dr. Sanjai Parthasarathi will moderate a session on scale-out datacenter networks, while VP Vipul Bhatt will discuss optical interconnects [4] Industry Context - The Optica Executive Forum serves as a key venue for industry dialogue on optical networking, highlighting the importance of collaboration in navigating rapid advancements in photonics and AI [5] - Coherent's involvement emphasizes its commitment to photonics innovation and collaboration within the ecosystem [5] Company Overview - Coherent is a global leader in photonics, founded in 1971, operating in over 20 countries, and providing a comprehensive technology stack for various industries [6]

Core Insights - Photonics technology utilizes light for various applications, including data transmission and medical uses, making it an attractive sector for investors seeking new tech opportunities [2] - The interaction between photonics and AI applications is crucial for tech investors, as photonics can provide the fast data transmission needed in the AI space [3] Company Summaries - Lumentum Holdings Inc. specializes in lasers and optical modules for telecommunications, reporting a 45% year-to-date increase in shares and a revenue growth of nearly two-thirds year-over-year to over $665 million for Q2 fiscal 2026 [4] - Lumentum's optical circuit switch business has a backlog of $400 million, and the company projects a revenue midpoint of $805 million for the current quarter, indicating an 85% year-over-year improvement [5] - Other photonics companies, such as Coherent and MKS Instruments, have also shown growth, with MKS offering a diversified approach in the photonics space [6]

Core Insights - Coherent Corp. has received awards for six of its products in the 2026 Lightwave Innovation Reviews, maintaining its leadership in optical networking innovation [1][2] Product Recognition - The 100G ZR QSFP28 DCO transceiver was recognized for its low latency variation, enabling precise time synchronization across various applications [3] - The 140 Gbaud IC-TROSA Extended C-Band supports ultra-fast symbol rates and lower power dissipation, enhancing next-generation 800G digital coherent optics [4] - 2D VCSEL Arrays for Optical Interconnects provide energy-efficient solutions for short-reach applications, delivering high bandwidth density and scalability [5] - The WaveAnalyzer™ 200B Portable Optical Spectrum Analyzer offers high-resolution spectral analysis in a compact form, facilitating rapid deployment and maintenance of optical networks [6] - The Flexgrid Octa C+L Dense Gain Equalizer enables dynamic optical power management, optimizing performance in flexible-grid DWDM networks [7] - The Multiport High-Resolution Optical Channel Monitor is designed for AI-driven data center interconnects, featuring ultra-fast scanning and high accuracy [8] Company Overview - Coherent is a global leader in photonics, providing technology solutions for the datacenter, communications, and industrial markets [10]

Financial Data and Key Metrics Changes - Fourth quarter revenue increased by 17% year-over-year and 9% sequentially, driven by stabilization in industrial demand and growth initiatives [5][18] - Full-year revenue grew by 3%, marking the first full-year revenue growth since 2021 [6] - GAAP gross margin was 36.1%, while adjusted gross margin was 37.6%, impacted by lower absorption of fixed costs and tariffs [21][22] - GAAP net income was $13 million or $0.31 per diluted share, with adjusted net income at $20 million, resulting in earnings per diluted share of $0.46 [23] Business Line Data and Key Metrics Changes - Materials processing revenue increased by 17% year-over-year, with stable demand in welding and growth in battery and additive manufacturing applications [5][18] - Medical sales grew by 21% year-over-year, driven by new product traction and a major customer win [8][9] - Revenue from applications outside materials processing increased by 15%, with strong growth in medical and advanced applications [18] Market Data and Key Metrics Changes - North America sales increased by 21% sequentially and 23% year-over-year, driven by higher revenue in cutting, cleaning, medical, and advanced applications [19] - Europe saw an 8% sequential increase and 7% year-over-year growth, primarily in additive manufacturing and cleaning [19] - Asia's revenue improved by 5% sequentially and 19% year-over-year, with strong demand in battery applications in China [20] Company Strategy and Development Direction - The company is focusing on expanding its business beyond materials processing, with 14% of total revenue coming from micromachining, medical, and advanced applications [8][11] - Strategic investments are being made in core industrial applications and new non-industrial markets, aiming to create new laser applications and expand the addressable market [12][13] - The company is evolving towards a team-led operating model to enhance decision-making and accelerate product development [11] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about improving market conditions and customer demand, despite ongoing macroeconomic uncertainties [10][28] - Strong bookings in Q4 resulted in a book-to-bill ratio above one, indicating positive demand trends [10][26] - The company anticipates revenue for Q1 2026 to be between $235 million and $265 million, with adjusted gross margin expected between 37% and 39% [26][27] Other Important Information - The company received a Prism Award for its new 8-kilowatt single-mode laser, reinforcing its position as a leader in fiber laser innovation [16] - The integration of cleanLASER has exceeded expectations, generating revenue synergies and enhancing growth in cleaning applications [14][15] Q&A Session Summary Question: Thoughts on cutting revenue stability and long-term growth targets - Management noted that cutting revenue has stabilized and is showing signs of growth, with ongoing investments in core markets [31][32] Question: Update on Directed Energy market and Crossbow product interest - Management reported strong customer interest in the Crossbow system, which targets military and civilian applications, and is seeing good traction in the market [35][38] Question: Margin improvement and revenue levels needed for fixed cost absorption - Management indicated that revenue levels above $270 million would help improve gross margins, with ongoing cost reduction initiatives in place [39][40] Question: Plans for investment in Directed Energy applications - Management confirmed a roadmap for increasing power levels in Directed Energy products, with plans for future product launches [45] Question: Expectations for new medical products in 2026 - Management expects significant growth in medical sales, with new product launches planned and a focus on doubling or tripling the business over the next few years [46][47] Question: Competitive environment and pricing pressures in Asia - Management stated that pricing pressures are minimal in differentiated markets, with strong demand in battery and advanced applications [60][61] Question: Variability in bookings by region - Management reported broad-based order activity, with North America and Asia performing well, while Europe showed signs of improvement [67]

Financial Data and Key Metrics Changes - Fourth quarter revenue increased by 17% year-over-year and 9% sequentially, driven by stabilization in industrial demand and growth in medical and advanced applications [5][17] - Full-year revenue grew by 3%, marking the first full-year revenue growth since 2021, with materials processing sales flat and welding revenue stable [6][9] - GAAP gross margin was 36.1%, while adjusted gross margin was 37.6%, impacted by planned inventory management and tariffs [20][22] Business Line Data and Key Metrics Changes - Materials processing revenue increased by 17% year-over-year, with strong performance in welding, marking, cleaning, and additive manufacturing [17] - Medical sales grew by 21% year-over-year, driven by new product traction and a major customer win [7][8] - Revenue from applications outside of materials processing accounted for approximately 14% of total revenue, with double-digit growth in micromachining, medical, and advanced applications [7][10] Market Data and Key Metrics Changes - North America sales increased by 21% sequentially and 23% year-over-year, driven by higher revenue in cutting, cleaning, medical, and advanced applications [18] - Europe saw an 8% sequential and 7% year-over-year increase, primarily from additive manufacturing and cleaning applications [18] - Asia revenue increased by 5% sequentially and 19% year-over-year, with strong demand in battery applications in China [19] Company Strategy and Development Direction - The company is focusing on strengthening its position in core industrial applications while penetrating new non-industrial markets, particularly in medical, micromachining, and directed energy [10][11] - The integration of cleanLASER has provided revenue synergies and enhanced growth in cleaning applications [12][13] - The company aims to capitalize on growth opportunities by combining laser technology with deep applications expertise to address complex customer challenges [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding improving market conditions and customer demand, despite ongoing macroeconomic uncertainties [9][10] - Strong bookings in Q4 resulted in a book-to-bill ratio above one, indicating positive demand trends [9][25] - The company plans to continue investing in growth initiatives while maintaining a strong balance sheet [24][26] Other Important Information - The company received a Prism Award for its new 8-kilowatt single-mode laser, reinforcing its position as a leader in fiber laser innovation [15] - The company is actively looking for tuck-in acquisitions to augment adjacent markets and accelerate growth [48][49] Q&A Session Summary Question: Thoughts on cutting revenue stability and long-term growth targets - Management noted that cutting revenue has stabilized and is expected to grow alongside investments in core markets like additive manufacturing and welding [31][33] Question: Update on Directed Energy opportunities and customer interest - Management reported strong customer interest in the Crossbow system for military and civilian applications, highlighting its differentiation and scalability [35][38] Question: Margin improvement and revenue levels needed for fixed cost absorption - Management indicated that revenue levels above $270 million could help improve gross margins, with ongoing cost reduction initiatives in place [39][40] Question: Plans for investment in Directed Energy applications - Management confirmed plans to increase investment in Directed Energy, with a roadmap for higher power systems in development [44][45] Question: Competitive environment and pricing pressures in Asia - Management stated that pricing remains stable in differentiated areas like battery and additive manufacturing, despite competitive pressures in cutting [60][61] Question: Updates on semiconductor exposure and growth expectations - Management highlighted engagement in lithography, metrology, and inspection, with expectations for growth aligned with semiconductor sector investments [71][72] Question: Clarification on micromachining and additive manufacturing applications - Management explained that additive manufacturing involves sintering powdered metal, while micromachining focuses on precision cutting and drilling for various industries [76][79]

Financial Data and Key Metrics Changes - Revenue for Q2 fiscal 2026 was $1.3 million, down from $1.6 million in Q2 fiscal 2025 and $1.4 million in Q1 fiscal 2026 [13] - GAAP net loss for the quarter was $1.9 million, or $0.11 per share, compared to a net loss of $2.9 million, or $0.24 per share in the prior year, and a net loss of $1.5 million, or $0.09 per share in the previous quarter [15] - Adjusted EBITDA loss for the quarter was $917,000, compared to a gain of $647,000 in the same period last year and a loss of $450,000 in Q1 fiscal 2026 [16] - The company closed the quarter with $38.6 million in cash and cash equivalents, an increase of $425,000 from the previous quarter [16] Business Line Data and Key Metrics Changes - Government R&D contracts were the principal source of revenue for the quarter, providing non-dilutive funding for R&D investments [14] - The company is witnessing a shift in customer conversations from interest and evaluation to pricing and planning, indicating progress in commercialization [6] Market Data and Key Metrics Changes - The top four hyperscalers invested over $300 billion in data center CapEx in 2025, expected to surpass $1 trillion by 2029, presenting a significant market opportunity [4] - The mobile market is preparing to adopt short-wave infrared (SWIR) sensors, with Aeluma's manufacturing platform enabling the necessary scale for mass markets [5] Company Strategy and Development Direction - Aeluma is focused on three primary near-term target markets: data centers, mobile, and defense, with ongoing activities across each [5] - The company aims to capitalize on its progress and the growing market horizon while pursuing strategic opportunities to accelerate commercialization [12] - Aeluma's technology is positioned to provide scalable quantum photonic systems, with a focus on integrating highly nonlinear materials on large substrates [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum building within the company, emphasizing the importance of converting this momentum into customer programs and transitioning to commercialization [19] - The company is actively pursuing strategic government programs that can accelerate commercialization opportunities [14] Other Important Information - Aeluma has expanded its patent portfolio to 35 issued and pending patents, enhancing its competitive advantage [11] - The company has appointed Bouch Nassar as Senior Vice President of Business Development and Product, expected to accelerate the go-to-market strategy [7] Q&A Session Summary Question: What are the end markets that you're getting sales orders for? - Management indicated that sales orders are coming from multiple markets including mobile, AI, data centers, and defense, but specific customer or product information is not being disclosed at this time [22] Question: Is this for receiving or operations or routing or sending of photons? - The current work is primarily focused on generating photons, with interest in building a comprehensive platform for photon management [23] Question: Can you provide more details on the magnitude of customer engagement? - Management noted that the increase in requests for quotations is a positive sign, indicating growing interest in their technology [28] Question: Can you discuss the adoption timeline for SWIR in mobile applications? - While a specific timeline cannot be provided, management noted that the mobile industry is gearing up to adopt SWIR technology for future products [30] Question: What strategic opportunities are being pursued for commercialization? - Management is exploring various pathways to market, including licensing deals and partnerships with supply chain partners [34]

Financial Data and Key Metrics Changes - Revenue for Q2 was a record $1.69 billion, up 7% sequentially and 17% year-over-year, driven by growth in AI data center and communications demand [24] - On a pro forma basis, excluding revenue from the divested aerospace and defense business, Q2 revenue increased 9% sequentially and 22% year-over-year [24] - Non-GAAP gross margin was 39%, a 24 basis point improvement sequentially and a 77 basis point improvement year-over-year [24] - Non-GAAP EPS was $1.29, compared to $1.16 in the prior quarter and $0.95 in the year-ago quarter, reflecting an 11% sequential growth and 35% year-over-year growth [27] Business Segment Data and Key Metrics Changes - In the data center and communication segment, which accounts for over 70% of revenue, Q2 revenue grew by 11% sequentially and 34% year-over-year [10] - Data center revenue grew 14% sequentially and 36% year-over-year, driven by strong execution and demand for 800G and 1.6T transceivers [10][11] - The communications market saw Q2 revenue grow 9% sequentially and 44% year-over-year, driven by data center interconnect and traditional telecom applications [18] - The industrial segment revenue grew 4% sequentially but was flat year-over-year on a pro forma basis, with expectations for improving demand in the future [20] Market Data and Key Metrics Changes - The book-to-bill ratio exceeded 4x in Q2, indicating strong demand and visibility for future orders [11][35] - Demand for 1.6T transceivers is expected to ramp significantly, with initial phases driven by EML and silicon photonics-based transceivers [12] - The optical circuit switch (OCS) platform backlog grew sequentially, with over 10 customer engagements, indicating strong future revenue potential [17] Company Strategy and Development Direction - The company is focused on expanding production capacity, particularly in indium phosphide, with plans to double capacity by the end of the calendar year [13][28] - The strategy includes optimizing pricing and reducing product input costs to enhance gross margins [25][76] - The company aims to streamline operations by exiting underutilized sites, having exited 10 sites in the last quarter [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained strong revenue growth due to exceptional demand from customers and rapid expansion of production capacity [7][8] - The company expects fiscal 2027 revenue growth rate to exceed that of fiscal 2026, driven by strong demand in both data center and industrial segments [8] - Management highlighted the extraordinary visibility of demand, with long-term forecasts extending into 2028 from major customers [35] Other Important Information - The company completed the sale of its Munich-based product division, which is expected to be accretive to gross margin and EPS [22][28] - Capital expenditures in Q2 were $154 million, with expectations for increased spending to support customer demand [27] Q&A Session Summary Question: Demand visibility and capacity ramp for indium phosphide - Management characterized demand visibility as extraordinary, with bookings extending into 2027 and long-term forecasts going out to 2028 [35] - The company is at 80% of its target capacity for indium phosphide ramp, with strong progress in wafer starts [38] Question: OCS backlog and revenue impact - Management indicated strong demand for OCS, with expectations for revenue growth throughout the calendar year and contributions to revenue next year [41][42] Question: 1.6T transceiver growth and competitive landscape - Management expects continued growth for both 800G and 1.6T transceivers, with 1.6T ramping significantly in the second half of the year [49] Question: CPO market opportunities - Management noted active engagements in scale-up opportunities for CPO, with significant growth potential as networks transition from electrical to optical [52] Question: Indium phosphide capacity and industry supply-demand balance - Management does not foresee supply-demand balance in the indium phosphide market this calendar year or next, indicating a sustained period of imbalance [69]