Coherent Corp. (NYSE: COHR) reported fiscal Q1 2026 revenue of $1.58 billion, up 17% year-over-year (19% on a pro forma basis adjusted for the sale of its Aerospace & Defense business). The company’s GAAP gross margin rose to 36.6%, while non-GAAP gross margin reached 38.7%. Net income climbed to $226 million, or $1.19 per diluted share on a GAAP basis, compared with a loss of $96 million in the prior quarter.
CEO Jim Anderson attributed the performance to accelerating demand from AI-driven data centers and optical communications. “We expect continued strong growth throughout this fiscal year based on increasing datacenter and communications demand along with our continued production capacity expansion,” he said. CFO Sherri Luther added that the company paid down $400 million in debt and refinanced its balance sheet to reduce interest expenses.
Coherent highlighted multiple product milestones this quarter, including sampling of a high-power 400 mW continuous-wave laser for Co-Packaged Optics (CPO) and silicon photonics, demonstration of 6 km 1.6 Tbps direct-detect links using electro-absorption modulated lasers (EMLs), and unveiling a 2D VCSEL array platform for near-packaged and co-packaged AI interconnects. The company also received ECOC’25 awards for both Most Innovative Photonic Component and Optical Transport Technology.
• Q1 revenue: $1.58 billion, up 17% Y/Y (19% pro forma)
• Non-GAAP gross margin: 38.7%, up 200 bps Y/Y
• Non-GAAP EPS: $1.16, up $0.49 Y/Y
• Paid down $400 million in debt; refinanced to lower interest expense
• Announced 400 mW laser for CPO and silicon photonic designs
• Demonstrated 6 km reach for 1.6 Tbps direct detect transceivers
• Showcased 2D VCSEL arrays for AI scale-up networks
• Earned two ECOC’25 Innovation Awards
For fiscal Q2 2026, Coherent expects revenue between $1.56 billion and $1.70 billion, non-GAAP gross margin of 38–40%, and EPS between $1.10 and $1.30.
“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,” said Anderson. “We expect continued strong growth throughout this fiscal year based on increasing datacenter and communications demand along with our continued production capacity expansion.”
🌐 Analysis: Coherent’s Q1 results underscore its strengthening position in AI-era optics, particularly in 800G–1.6T transceivers, CPO lasers, and short-reach interconnects for hyperscale data centers. The company’s recent ECOC wins align it with peers like Lumentum, Broadcom, and Infinera that are also scaling photonic components for AI fabrics. Coherent’s product traction in VCSEL and EML technologies could position it as a key enabler for the next generation of AI network architectures.
