Coherent Inc (COHR) Q2 2025 Earnings Report

Coherent delivered a record quarterly revenue of $1.435 billion in Q2 FY2025, up 6% sequentially and 27% year over year, driven by AI-enabled datacom demand, telecom recovery, and broad industrial end-market strength. Management emphasized gross-margin expansion as a deliberate strategic objective, supported by pricing and cost-reduction initiatives, alongside ongoing R&D investment to sustain long-term growth. The company also advanced key platform initiatives, including 1.6T transceivers, 3.2T roadmaps, and the new data center optical circuit switch (OCS), which generated the first customer order in Q2 and is expected to contribute revenue in calendar 2025 with larger ramp in 2026–2027. Net income rose to $103.4 million and non-GAAP EPS reached $0.95, underscoring meaningful profitability improvement from a year earlier and solid operating leverage as revenue grew. In parallel, Coherent continued to deleverage the balance sheet, paying down $132 million of debt, and maintaining a disciplined approach to capital allocation with a focus on sustaining gross-margin improvement and long-term shareholder value. The quarter also underscored management’s confidence in a multi-year growth trajectory supported by a broad portfolio of photonic technologies and a diversified exposure to data-center AI demand, telecom networking, and high-value industrial applications. Outlook remains constructive: Q3 revenue guidance of $1.39–$1.48 billion, non-GAAP gross margin of 37–39%, and non-GAAP EPS of $0.75–$0.95 reflect ongoing investments in growth initiatives and a path toward durable gross margins above 40%. The company will host Investor Day on May 28 to articulate the long-term model, market opportunities and product road map.”,