Quarterly trend
Coherent’s quarterly trend over the last eight reporting quarters reflects a clean two-phase shape: a FY2024 trough (revenue ~$1.2B/quarter, GAAP losses, weak margins) followed by a FY2025 ramp (revenue $1.35B → $1.53B, gross margin expanding 200+ bps quarterly, swinging to GAAP profit) and the FY2026 H1 strength ($1.58B → $1.69B, with non-GAAP gross margin pushing past 39%). The single dominant variable through this period has been AI-datacenter optical transceiver demand flowing through what was the Networking segment (FY2024–FY2025) and is now the Datacenter & Communications segment (FY2026 onward).
Fiscal-year reminder: Coherent’s fiscal year ends Saturday closest to June 30. FY2024 = Jul 2023 – Jun 2024 (ended June 29, 2024); FY2025 = Jul 2024 – Jun 2025 (ended June 28, 2025); FY2026 = Jul 2025 – Jun 2026 (ends ~June 27, 2026). FY-Q1 is Sep, Q2 is Dec, Q3 is Mar, Q4 is Jun.
Quarterly summary table — last 8 quarters
| Period | Period-end | Revenue ($M) | YoY % | Sequential % | GAAP GM | Non-GAAP GM | Non-GAAP OM | GAAP EPS | Non-GAAP EPS | Source |
|---|---|---|---|---|---|---|---|---|---|---|
| Q3 FY2024 | Mar 30, 2024 | 1,213 | +1% | +0% | 30.4% | 35.0% | ~10% | $(0.93) | $0.27 | Q3 FY24 release ✓ |
| Q4 FY2024 | Jun 29, 2024 | 1,314 | +18% | +8% | 30.9% | 36.6% | ~13% | $(0.52) | $0.61 | Q4 FY24 release ✓ |
| FY2024 (full) | Jun 29, 2024 | 4,708 | +1% | n/a | 30.9% | 34.3% | ~13% | $(1.84) | $1.21 | FY24 10-K ✓ |
| Q1 FY2025 | Sep 28, 2024 | 1,348 | +12% | +3% | 32.3% | 36.7% | ~13% | $(0.04) | $0.74 | Q1 FY25 release ✓ |
| Q2 FY2025 | Dec 28, 2024 | 1,435 | +27% | +6% | 35.5% | 38.2% | ~18% | $0.03 | $0.95 | Q2 FY25 release ✓ |
| Q3 FY2025 | Mar 29, 2025 | 1,498 | +24% | +4% | 35.2% | 38.5% | ~18% | $(0.11) | $0.91 | Q3 FY25 release ✓ |
| Q4 FY2025 | Jun 28, 2025 | 1,529 | +16% | +2% | 35.2% (FY full) | 37.9% (FY) | ~17.8% (FY) | n/a | $0.91 | Q4 FY25 release ✓ |
| FY2025 (full) | Jun 28, 2025 | 5,810 | +23% | n/a | 35.2% | 37.9% | 17.8% | $(0.52) | $3.53 | FY25 10-K ✓ |
| Q1 FY2026 | Sep 27, 2025 | 1,580 | +17% | +3% | 36.6% | 38.7% | ~19% | $1.19 | $1.16 | Q1 FY26 release ✓ |
| Q2 FY2026 | Dec 27, 2025 | 1,686 | +17.5% | +7% | 36.9% | 39.0% | 19.9% | $0.76 | $1.29 | Q2 FY26 release ✓ |
| FY2026 H1 | Dec 27, 2025 | 3,266 | +17% | n/a | 36.7% | 38.9% | ~19.5% | $1.95 | $2.45 | composite |
Q1 FY2026 GAAP EPS includes a one-time tax benefit; underlying operating EPS is closer to non-GAAP $1.16.
Segment revenue evolution
The segment-reporting structure changed in FY2026. Through FY2025, Coherent reported Networking / Materials / Lasers; from FY2026 onward, Datacenter & Communications / Industrial. Translation table:
| Segment (FY2026 reporting) | Maps from (FY2025 reporting) |
|---|---|
| Datacenter & Communications | Networking |
| Industrial | Materials + Lasers |
| Period | Networking ($M) | Materials ($M) | Lasers ($M) | Datacenter & Comm ($M) | Industrial ($M) |
|---|---|---|---|---|---|
| Q3 FY2024 | 616 | ~245 | ~352 | n/a (legacy) | n/a |
| Q4 FY2024 | 685 | ~250 | ~379 | n/a | n/a |
| FY2024 full | 2,296 | 1,017 | 1,395 | n/a | n/a |
| Q1 FY2025 | 766 | 230 | 352 | n/a | n/a |
| Q2 FY2025 | 819 | 247 | 369 | n/a | n/a |
| Q3 FY2025 | 897 | 237 | 364 | n/a | n/a |
| Q4 FY2025 | 945 | ~240 | ~344 | n/a | n/a |
| FY2025 full | 3,421 | 954 | 1,435 | n/a | n/a |
| Q1 FY2026 | n/a (legacy) | n/a | n/a | ~1,097 | ~483 |
| Q2 FY2026 | n/a | n/a | n/a | 1,208 (+33.6% YoY) | 478 (–9.9% YoY) |
| FY2026 H1 | ~2,305 (+~30% YoY) | ~961 (–~7% YoY) |
⚠ Q1 FY2026 segment split is calculated from the $1.58B total minus Q2 FY2026 disclosed Industrial $478M with the Q1/Q2 industrial trajectory roughly flat — values approximate.
The structural picture:
- Datacenter & Communications grew from $616M (Q3 FY2024) to $1,208M (Q2 FY2026) — ~95% over 7 quarters. The segment is the dominant revenue driver and is the source of ASP-discipline-driven margin expansion.
- Industrial (Materials + Lasers) is approximately flat with a modest –9.9% YoY decline in Q2 FY2026 reflecting the broader industrial-capex weakness and the Aerospace & Defense divestiture in CY2025.
- The mix shift toward Datacenter & Communications (~72% of total in Q2 FY2026 vs ~50% in FY2024) is the structural margin driver — Datacom optics gross margins are richer than Industrial laser systems.
Margin expansion mechanics
| Period | Non-GAAP GM | YoY bps Δ | Driver |
|---|---|---|---|
| Q3 FY2024 | 35.0% | flat | Pre-AI-cycle baseline |
| Q4 FY2024 | 36.6% | +163 | Mix shift starting |
| Q1 FY2025 | 36.7% | +200 | Networking ramp |
| Q2 FY2025 | 38.2% | +260 | Mix + ASP discipline |
| Q3 FY2025 | 38.5% | +250 | 6-inch InP cost benefit emerging |
| Q4 FY2025 | 37.9% (FY) | +358 (FY) | Composite full-year |
| Q1 FY2026 | 38.7% | +200 | Continued mix; 200G EML ASP uplift |
| Q2 FY2026 | 39.0% | +77 | Mix + 6-inch cost benefit; 1.6T module ramp |
The gross margin expansion is structural, not just mix-driven. Coherent is benefiting from (a) the 6-inch InP wafer-fab cost reduction (~60% die-cost reduction vs 3-inch), (b) supply-tightness ASP discipline on EMLs, and (c) operating-leverage on a larger revenue base. The Q2 FY2026 +77 bps YoY non-GAAP GM expansion is more modest than prior quarters partly because the comparison base (Q2 FY2025: 38.2%) was already strong.
Management framing on Q2 FY2026: 1.6T module gross margins expected to exceed 800G levels, particularly early in the lifecycle, aided by 6-inch InP cost advantages (Futurum Group analysis) ◐.
Q3 FY2026 guidance (issued Feb 4, 2026)
| Metric | Q3 FY2026 guidance | Implied YoY |
|---|---|---|
| Revenue | $1,700M–$1,840M | +13% to +23% |
| Non-GAAP gross margin | 38.5%–40.5% | flat to +200 bps |
| Non-GAAP operating expenses | $320M–$340M | controlled |
| Non-GAAP EPS | $1.28–$1.48 | +41% to +63% YoY |
Source: Coherent Q2 FY2026 press release ✓.
Capex trajectory
| Period | Capex ($M) | % of revenue |
|---|---|---|
| FY2024 | n/a in this dataset | ~6–7% |
| FY2025 | 440.8 | 7.6% |
| H1 FY2026 | 257.5 | 7.9% |
| Q2 FY2026 | 154 | 9.1% |
Capex is accelerating in absolute terms — from FY2024 baseline through the FY2026 H1 ~9% of revenue rate. The driver is the Sherman TX 6-inch InP fab build plus 200G EML production capacity. Management has framed continued sequential capex increases through FY2026 to “support rapid capacity expansion in datacenter and communications” (Q2 FY2026 release) ✓.
Cash and debt trajectory
| Period | Cash + STI ($M) | Total debt ($M) | Net debt ($M) |
|---|---|---|---|
| End FY2024 | n/a | ~$4,200 | ~$3,500 |
| End FY2025 | 909 | 3,687 | 2,778 |
| End Q1 FY2026 | n/a | 3,287 (paid down $400M) | n/a |
| End Q2 FY2026 | 864 | 3,352 | 2,488 |
| Pro-forma post-NVDA (Mar 2026) | ~$2,800–3,000 | ~$3,000–3,200 | net-cash positive |
The balance-sheet trajectory has been deleveraging since the 2022 Coherent Inc. acquisition close. The $437M debt repayment in FY2025 and the $400M Q1 FY2026 paydown are visible in the trajectory. The March 2026 NVDA $2B equity injection materially de-risks the structure — see balance sheet.
Cross-link
- Segment revenue mix — Datacenter & Communications vs Industrial split
- Margins and pricing — ASP and unit-economics detail
- Balance sheet — debt + cash + preferred + NVDA stake
- Capex cycle — Sherman TX fab capacity plan
- Earnings calls — management commentary
- LITE — quarterly trend — duopoly-partner comparison
Sources
- Coherent Q2 FY2026 press release Feb 4, 2026 ✓
- Coherent Q1 FY2026 press release Nov 5, 2025 ✓
- Coherent Q4 FY2025 / Full-year FY2025 press release Aug 13, 2025 ✓
- Coherent FY2025 annual report ✓
- Coherent FY2024 annual report ✓
- Q3 FY2025 press release May 7, 2025 ✓
- Coherent Q1 FY2026 transcript via Motley Fool ◐
- Futurum Group Q2 FY2026 analysis ◐