Coherent Corp. · Earnings release

Coherent Corp.

PRESS RELEASE

COHERENT CORP. REPORTS FIRST QUARTER FISCAL 2026 RESULTS

•

Q1 REVENUE OF $1.58B, INCREASED 17% Y/Y AND, ON A PRO FORMA BASIS, 19% Y/Y ADJUSTED FOR SALE OF

AEROSPACE & DEFENSE BUSINESS

•

Q1 GAAP GROSS MARGIN OF 36.6%, INCREASED 249 bps Y/Y; Q1 NON-GAAPGROSS MARGIN OF 38.7%, INCREASED 200 bps Y/Y

•

SAXONBURG, Pa., November 5, 2025 (GLOBE NEWSWIRE) – Coherent Corp. (NYSE: COHR)

(“Coherent,” “We,” or the “Company”), a global leader in photonics, announced financial results today for its first quarter of fiscal year 2026 ended September 30, 2025.

Revenue for the first quarter of fiscal 2026 was $1.58 billion, with GAAP gross margin of 36.6% and GAAP net income of $1.19 per diluted share. On a non-GAAP basis, gross margin was 38.7% with net income per diluted share of $1.16.

Jim Anderson, CEO, said,

“Revenue growth of 19% year-over-year in the September quarter on a pro forma basis was driven by strong demand from AI-related datacenters and communications. We expect continued strong growth

throughout this fiscal year based on increasing datacenter and communications demand along with our continued production capacity expansion.”

Sherri Luther, CFO, said, “Significant revenue growth and gross margin expansion drove a year-over-year increase in our GAAP and non-GAAP EPS. During the quarter, we paid down $400 million of our debt. We also refinanced our debt which will reduce our interest expense and further strengthen our balance sheet.”

1

Selected First Quarter Financial Results and Comparisons (in millions, except percentages and per share

data)

Table 1

GAAP Financial Results (unaudited)

Q/Q

Y/Y

Revenues

$

$

$

%

%

Gross Margin %

%

%

%

R&D Expense %

%

%

%

3 bps

SG&A Expense %

%

%

%

(6) bps

Operating Expenses

$

$

$

)%

)%

Operating Income(1)

$

$

6

$

%

%

Operating Margin

%

%

%

Net Earnings (Loss) Attributable to Coherent Corp.

$

$

)

$

)%

%

Diluted Earnings (Loss) Per Share

$

$

)

$

)

$

$

(1)

Operating Income is defined as earnings (loss) before income taxes, interest expense, and other expense or

income, net.

Selected First Quarter Financial Results and Comparisons (in millions, except percentages and per share data)

Table 1, continued

Non-GAAP Financial Results (unaudited)(1)(2)

Q/Q

Y/Y

Revenues

$

$

$

%

%

Gross Margin %

%

%

%

R&D Expense %

%

%

%

1 bps

SG&A Expense %

%

%

%

Operating Expenses

$

$

$

)%

%

Operating Income

$

$

$

%

%

Operating Margin

%

%

%

Net Earnings Attributable to Coherent Corp.

$

$

$

%

%

Diluted Earnings Per Share

$

$

$

$

$

(1)

During the second fiscal quarter of 2025, the Company refined its methodology to report non-GAAP measures. The change does not impact the Company’s financial position, cash flows, or GAAP consolidated results of operations. Prior period non-GAAP financial

measures presented in this press release have been recast to conform to the current presentation.

(2)

The Company has disclosed financial measurements in this earnings release that present financial information

considered to be non-GAAP financial measures. These measurements are not a substitute for GAAP measurements, although the Company’s management uses these measurements as an aid in monitoring the

Company’s on-going financial performance. The non-GAAP net earnings attributable to Coherent Corp., the non-GAAP diluted

earnings per share, the non-GAAP operating income, the non-GAAP gross margin, the non-GAAP research and development, the non-GAAP selling, general and administration, the non-GAAP operating expenses, the non-GAAP interest and other (income) expense, and

the non-GAAP income taxes, measure earnings and operating income (loss), respectively, excluding non-recurring or unusual items that are considered by management to be

outside the Company’s standard operation and excluding certain non-cash items. There are limitations associated with the use of non-GAAP financial measures,

including that such measures may not be entirely comparable to similarly

2

titled measures used by other companies, due to potential differences among calculation methodologies. Thus, there can be no assurance whether (i) items excluded from the non-GAAP financial measures will occur in the future or (ii) there will be cash costs associated with items excluded from the non-GAAP financial measures. The Company

compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by providing the reconciliations of thenon-GAAP financial measures to their most comparable GAAP financial measures. Investors should consider adjusted measures in addition to, and not as a substitute for, or superior to, financial performance

measures prepared in accordance with GAAP. All non-GAAP amounts exclude certain adjustments for share-based compensation, acquired intangible amortization expense, restructuring charges (recoveries),

impairments of assets held-for-sale, gains on sale of business, integration and site consolidation expenses, integration transaction expenses, and various one-time adjustments. See Table 6 for the Reconciliation of GAAP measures to non-GAAP measures.

Highlights from First Quarter Fiscal 2026

•

Closed Sale of Aerospace and Defense Business. We closed the sale of our Aerospace and Defense business.

The transaction is immediately accretive to both gross margin and EPS.

•

Introduced a High-Power 400 mW CW Laser for Co-Packaged Optics (CPO) and Silicon Photonic Designs. We are currently sampling to multiple customers our new 400 mW CW lasers, which offer best in class performance.

•

ECOC’25 Award for Most Innovative Photonic Component. Industry’s first 400G Differential-EML to enable power and cost efficient 3.2T data center transceivers.

•

Extending the Reach of 1.6T Direct Detect Transceivers to 6 km. Through a unique embedded dispersion

compensation technique, we demonstrated 6 km 1.6T links based on EMLs, offering a cost-effective and lower-power alternative for scale across networks.

•

Demonstrated a Next-Gen 2D VCSEL Array-Based Solution for AI Scale-up Networks. These arrays represent a breakthrough in short-reach optical interconnects for Near-Packaged Optics (NPO) and Co-Packaged Optics (CPO), which enable

compact, power-efficient links for the scale-up portion of AI networks.

•

ECOC’25 Award for Optical Transport. Our Multi-Rail Technology platform leverages

advanced optical amplification technology enabling unprecedented levels of power, space and cost efficiency.

3

Business Outlook – Second Quarter Fiscal

•

G1Revenue for the second quarter of fiscal 2026 is expected to be between $1.56 billion and

•

G2Gross margin percentage for the second quarter of fiscal 2026 is expected to be between 38% and 40% on a non-GAAP basis.

•

G3Total operating expenses for the second quarter of fiscal 2026 are expected to be between $300 million and

$320 million on a non-GAAP basis.

•

G4Tax rate for the second quarter of fiscal 2026 is expected to be between 18% and 20% on a non-GAAP basis.

•

G5EPS for the second quarter of fiscal 2026 is expected to be between $1.10 and $1.30 on a non-GAAP basis.

(1)

The Company has not provided a quantitative reconciliation of forward-lookingnon-GAAP gross margin percentage, non-GAAP operating expenses, non-GAAP tax rate andnon-GAAP earnings per share, because we cannot, without unreasonable efforts, forecast certain items required to develop comparable GAAP measures. These items include, without limitation, restructuring

charges, integration, site consolidation and other expenses, foreign exchange gains (losses), and share based compensation expense. The variability of these items could significantly impact our future GAAP financial results and we believe that the

inclusion of any such reconciliations would imply a degree or precision that could be confusing or misleading to investors.

Investor

Conference Call / Webcast Details

Coherent will review the Company’s financial results for its first quarter of fiscal 2026 and business outlook

on Wednesday, November 5, at 5:00 p.m. ET. A live webcast and replay of the conference call will be available on the Investor Relations section of the Company’s website at coherent.com/company/investor-relations. The

Company’s financial guidance will be limited to the comments on its public quarterly earnings call and the public business outlook statements contained in this press release.

Additional Information and Where to Find It

In

connection with the conference call described above, the Company intends to file an investor presentation as an exhibit to a Current Report on Form 8-K filed with the Securities and Exchange Commission

(“SEC”) and to post the investor presentation on the Company’s website at coherent.com/company/investor-relations/investor-presentations after market close on November 5, 2025. We also may, from time to time, post other

important information for investors on our website at coherent.com/company/investor-relations. We intend to use our website as a means of disclosing material, non-public information and for complying

with our disclosure obligations under Regulation FD. Accordingly, investors should review the Investor Relations page of our website referenced above, in addition to following the Company’s press releases, SEC filings, and public conference

calls, presentations, and webcasts. Investors and security holders are able to obtain free copies of these documents through the Company’s website referenced above. Copies of the documents filed by the Company with the SEC may be obtained free

of charge on the Company’s website at coherent.com/company/investor-relations/sec-filings. The information contained on, or that may be accessed through, the Company’s website is not

incorporated by reference into, and is not part of, this release.

4

Forward-Looking Statements

This press release contains statements, estimates, and projections that constitute “forward-looking statements” as defined under U.S. federal

securities laws, including our estimates and projections for our business outlook for the second quarter of fiscal 2026, each of which is made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 and

relate to the Company’s performance on a going-forward basis. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause the Company’s actual results to differ materially from its

historical experience and our present expectations or projections.

The Company believes that all forward-looking statements made by it herein have a

reasonable basis, but there can be no assurance that management’s expectations, beliefs, or projections as expressed in the forward-looking statements will actually occur or prove to be correct. In addition to general industry and global

economic conditions, factors that could cause actual results to differ materially from those discussed in the forward-looking statements herein include but are not limited to: (i) the failure of any one or more of the assumptions stated herein

to prove to be correct; (ii) changes in demand in the Company’s end markets along with the Company’s ability to respond to such market changes; (iii) risks relating to future integration and/or restructuring actions;

(iv) fluctuations in purchasing patterns of customers and end users; (v) the ability of the Company to retain and hire key employees; (vi) the terms of the Company’s indebtedness and ability to service such debt in connection

with its acquisition of Coherent, Inc.; (vii) the timely release of new products and acceptance of such new products by the market; (viii) the introduction of new products by competitors and other competitive responses; (ix) the

Company’s ability to assimilate other recently acquired businesses, and realize synergies, cost savings, and opportunities for growth in connection therewith, together with the risks, costs, and uncertainties associated with such acquisitions;

(x) the risks to realizing the benefits of investments in R&D and commercialization of innovations; (xi) the risks that the Company’s stock price will not trade in line with industrial technology leaders; (xii) the impact of

trade protection measures, such as import tariffs by the United States or retaliatory actions taken by other countries; and/or (xiii) the risks relating to forward-looking statements and other “Risk Factors” identified from time to

time in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and our subsequently filed Quarterly Reports on Form10-Q, which filings are available from the SEC. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company disclaims any obligation to update

information contained in these forward-looking statements, whether as a result of new information, future events or developments, or otherwise.

5

About Coherent

Coherent is the global photonics leader. We harness photons to drive innovation. Industry leaders in the datacenter, communications, and industrial markets

rely on Coherent’s world-leading technology to fuel their own innovation and growth.

Founded in 1971 and operating in more than 20 countries,

Coherent brings the industry’s broadest, deepest technology stack; unmatched supply chain resilience; and global scale to help its customers solve their toughest technology challenges. For more information, please visit us at coherent.com.

Contact:

Paul Silverstein

Senior VP, Investor Relations

investor.relations@coherent.com

# # #

6

Table 2

Coherent Corp. and Subsidiaries

Condensed Consolidated

Statements of Earnings (Loss)*

THREE MONTHS ENDED

Millions for shares, $ Millions, except per share amounts

Revenues

$

$

$

Costs, Expenses & Other Expense (Income)

Cost of goods sold

Research and development

Selling, general and administrative

Restructuring charges

Impairment of assetsheld-for-sale

—

Gain on sale of business

)

—

—

Interest expense

Other expense (income), net

)

)

Total Costs, Expenses, & Other Expense

Earnings (Loss) Before Income Taxes

)

Income Taxes

)

)

Net Earnings (Loss)

)

Net Loss Attributable to Noncontrolling Interests

)

)

)

Net Earnings (Loss) Attributable to Coherent Corp.

$

$

)

$

Less: Dividends on Preferred Stock

Net Earnings (Loss) Available to the Common Shareholders

$

$

)

$

)

Basic Earnings (Loss) Per Share

$

$

)

$

)

Diluted Earnings (Loss) Per Share

$

$

)

$

)

Average Shares Outstanding - Basic

Average Shares Outstanding - Diluted

(1)

*

Amounts may not recalculate due to rounding.

(1)

The total number of shares used to calculate earnings per share in Q1 increased to 190.7 million, primarily

because of accounting rules that require us to include our Series B Preferred Shares as if they were converted into common shares. As part of this calculation, we also added back the preferred cash dividend to earnings used to calculate diluted

earnings per share.

7

Table 3

Coherent Corp. and Subsidiaries

Condensed Consolidated

Balance Sheets*

$ Millions (unaudited)

Assets

Current Assets

Cash and cash equivalents

$

$

Restricted cash, current

Accounts receivable

Inventories

Prepaid and refundable income taxes

Prepaid and other current assets

Total Current Assets

Property, plant & equipment, net

Goodwill

Other intangible assets, net

Deferred income taxes

Restricted cash, non-current

Other assets

Total Assets

$

$

Liabilities, Mezzanine Equity and Equity

Current Liabilities

Current portion of long-term debt

$

$

Accounts payable

Operating lease current liabilities

Accruals and other current liabilities

Total Current Liabilities

Long-term debt

Deferred income taxes

Operating lease liabilities

Other liabilities

Total Liabilities

Total Mezzanine Equity

Total Coherent Corp. Shareholders’ Equity

Noncontrolling interests

Total Equity

Total Liabilities, Mezzanine Equity and Equity

$

$

*

Amounts may not recalculate due to rounding.

8

Table 4

Coherent Corp. and Subsidiaries

Condensed Consolidated

Statements of Cash Flows*

THREE MONTHS ENDED

$ Millions (unaudited)

Cash Flows from Operating Activities

Net cash provided by operating activities

$

$

Cash Flows from Investing Activities

Additions to property, plant & equipment

)

)

Proceeds from the sale of business

Proceeds from sale of equity investment

—

Other investing activities

—

)

Net cash provided by (used in) investing activities

)

Cash Flows from Financing Activities

Proceeds from borrowings of Term A Facility

—

Proceeds from borrowings of Term B Facility

—

Proceeds from borrowings of revolving credit facilities

—

Payments on existing debt

)

)

Payments on borrowings under revolving credit facilities

)

—

Debt issuance costs

)

—

Proceeds from exercises of stock options and purchases under employee stock purchase plan

Payments in satisfaction of employees’ minimum tax obligations

)

)

Payment of dividends

)

—

Other financing activities

)

Net cash used in financing activities

)

)

Effect of exchange rate changes on cash and cash equivalents

)

Net decrease in cash and cash equivalents

)

)

Cash, Cash Equivalents, and Restricted Cash at Beginning of Period

Cash, Cash Equivalents, and Restricted Cash at End of Period

$

$

*

Amounts may not recalculate due to rounding.

9

Table 5

Segment Revenues*

THREE MONTHS ENDED

$ Millions (unaudited)

Revenues:

Datacenter & Communications

$

$

$

Industrial

Consolidated

$

$

$

*

Amounts may not recalculate due to rounding.

Table 6

Reconciliation of GAAP Measures to Non-GAAP Measures*

THREE MONTHS ENDED

$ Millions, except per share amounts (unaudited)

Gross margin on GAAP basis

$

$

$

Share-based compensation

Amortization of acquired intangibles

Integration, site consolidation and

other(2)

)

)

)

Gross margin on non-GAAP basis

$

$

$

Research and development on GAAP basis

$

$

$

Share-based compensation

)

)

)

Amortization of acquired intangibles

)

)

)

Integration, site consolidation and

other(2)

—

Research and development on non-GAAP basis

$

$

$

Selling, general and administrative on GAAP basis

$

$

$

Share-based compensation

)

)

)

Amortization of acquired intangibles

)

)

)

Integration, site consolidation and

other(2)

)

)

)

Financing fees(3)

)

—

—

Selling, general and administrative on non-GAAPbasis

$

$

$

Restructuring charges on GAAP basis

$

$

$

Restructuring charges(4)

)

)

)

Restructuring charges on non-GAAP basis

$

—

$

—

$

—

Impairment of assetsheld-for-sale on GAAP basis

$

$

$

—

Impairment of assetsheld-for-sale(5)

)

)

—

Impairment of assetsheld-for-sale on non-GAAP basis

$

—

$

—

$

—

Gain on sale of business on GAAP basis

$

)

$

—

$

—

Gain on sale of business(6)

—

—

Gain on sale of business on non-GAAP basis

$

—

$

—

$

—

Operating income on GAAP basis

$

$

$

Share-based compensation

Amortization of acquired intangibles

Restructuring charges(4)

Impairment of assetsheld-for-sale(5)

—

Gain on sale of business(6)

)

—

—

Integration, site consolidation and

other(2)

Financing fees(3)

—

—

Operating income on non-GAAP basis

$

$

$

Table 6

Reconciliation of GAAP Measures to Non-GAAP Measures*

(Continued)

THREE MONTHS ENDED

$ Millions, except per share amounts (unaudited)

Interest and other (income) expense, net on GAAP basis

$

$

$

Foreign currency exchange gains (losses), net

)

)

Gain on sale of investment(7)

—

—

Financing fees(3)

)

—

—

Interest and other (income) expense, net on non-GAAPbasis

$

$

$

Income taxes on GAAP basis

$

)

$

$

)

Tax impact of non-GAAP measures(8)

Income taxes on non-GAAP basis

$

$

$

Net earnings (loss) attributable to Coherent Corp. on GAAP basis

$

$

)

$

Share-based compensation

Amortization of acquired intangibles

Foreign currency exchange (gains) losses

)

Restructuring charges(4)

Impairment of assetsheld-for-sale(5)

—

Gain on sale of business(6)

)

—

—

Integration, site consolidation and

other(2)

Gain on sale of investment(7)

)

—

—

Financing fees(3)

—

—

Tax impact of non-GAAP measures(8)

)

)

)

Net earnings attributable to Coherent Corp. on non-GAAPbasis

$

$

$

Per share data:

Net earnings (loss) on GAAP basis

Basic Earnings (Loss) Per Share

$

$

)

$

)

Diluted Earnings (Loss) Per Share

$

$

)

$

)

Net earnings on non-GAAP basis

Basic Earnings Per Share

$

$

$

Diluted Earnings Per Share

$

$

$

*

Amounts may not recalculate due to rounding.

(1)

During the second fiscal quarter of 2025, the Company refined its methodology to report non-GAAP measures. The change does not impact the Company’s financial position, cash flows, or GAAP consolidated results of operations. Prior period non-GAAP financial

measures presented in this press release have been recast to conform to the current presentation.

(2)

Integration, site consolidation and other costs include retention and severance payments and other integration

costs related to the acquisition of Coherent, Inc., implementation of common technology systems and costs related business divestitures.

(3)

Financing fees includes debt extinguishment costs and various fees related to closing the new Credit Agreement

and repricing our Term Loan B.

(4)

Restructuring charges include non-cash impairment charges for

production assets and improvements on leased facilities, loss on sale of a facility, severance, contract termination costs and other costs related to the restructuring plans.

(5)

Impairment of assetsheld-for-sale relate to several entities classified as held-for-sale at

(6)

Gain on sale of business is due to the sale of our aerospace and defense business.

(7)

Gain on sale of investment is due to the sale of shares in an equity method investment.

(8)

The Company adopted a full-year, normalized tax rate for the computation of thenon-GAAP income tax provision for fiscal year 2026. We believe this approach provides investors with a more consistent view of our underlying operating performance. In estimating the full-year non-GAAP normalized tax rate, the Company utilized a full-year financial projection that considers multiple factors such as changes to the Company’s current operating structure, expected reserve changes for

the year, and other significant tax matters to the extent they are applicable to the full fiscal year financial projection. In addition to the adjustments described above, this normalized tax rate excludes the impact of share-based awards,

amortization of acquisition-related intangible assets, integration and restructuring charges, foreign exchange gain/(loss), and certain tax valuation allowances.

The first quarter and full-year fiscal year 2026 outlook assume a projected annual effective tax rate of 19% fornon-GAAP unless adjusted for material events. The non-GAAP tax rate utilized in future periods will be reviewed annually to determine whether it remains appropriate

in consideration of our financial results. These additional non-GAAP financial measures should not be considered substitutes for any measures derived in accordance with GAAP and may be inconsistent with

similar measures presented by other companies.

Table 7

GAAP Earnings (Loss) Per Share Calculation*

THREE MONTHS ENDED

Millions for shares, $ Millions, except per share amounts (unaudited)

Numerator

Net earnings (loss) attributable to Coherent Corp.

$

$

)

$

Deduct Series B redeemable preferred dividends

)

)

)

Basic earnings (loss) available to common shareholders

$

$

)

$

)

Effect of dilutive securities

Add back Series B Preferred deemed dividends

$

$

—

$

—

Diluted earnings (loss) available to common shareholders

$

$

)

$

)

Denominator

Weighted average shares

Effect of dilutive securities:

Common stock equivalents

—

—

Series B Redeemable Preferred Stock

—

—

Diluted weighted average common shares

(1)

Basic earnings (loss) per common share

$

$

)

$

)

Diluted earnings (loss) per common share

$

$

)

$

)

*

Amounts may not recalculate due to rounding.

(1)

The total number of shares used to calculate earnings per share in Q1 increased to 190.7 million, primarily

because of accounting rules that require us to include our Series B Preferred Shares as if they were converted into common shares. As part of this calculation, we also added back the preferred cash dividend to earnings used to calculate diluted

earnings per share.

Table 8

Non-GAAP Earnings Per Share Calculation*

THREE MONTHS ENDED

Millions for shares, $ Millions, except per share amounts (unaudited)

Numerator

Net earnings attributable to Coherent Corp. on non-GAAPbasis

$

$

$

Deduct Series B redeemable preferred dividends

)

)

)

Basic earnings available to common shareholders

$

$

$

Effect of dilutive securities

Add back Series B Preferred Stock dividends

$

$

—

$

—

Diluted earnings available to common shareholders

$

$

$

Denominator

Weighted average shares outstanding

Effect of dilutive securities:

Common stock equivalents

Series B Redeemable Preferred Stock

—

—

Diluted weighted average common shares outstanding

(2)

Basic earnings per common share on non-GAAPbasis

$

$

$

Diluted earnings per common share on non-GAAPbasis

$

$

$

*

Amounts may not recalculate due to rounding.

(1)

During the second fiscal quarter of 2025, the Company refined its methodology to report non-GAAP measures. The change does not impact the Company’s financial position, cash flows, or GAAP consolidated results of operations. Prior period non-GAAP financial

measures presented in this press release have been recast to conform to the current presentation.

(2)

The total number of shares used to calculate earnings per share in Q1 increased to 190.7 million, primarily

because of accounting rules that require us to include our Series B Preferred Shares as if they were converted into common shares. As part of this calculation, we also added back the preferred cash dividend to earnings used to calculate diluted

earnings per share.