Coherent (COHR) Q1 2027 earnings summary

Executive summary

• Q1 FY27 revenue was $2,370.3M, up 49.9% YoY reported and 56% YoY pro forma; non-GAAP diluted EPS was $2.09, up 80%.

• Datacenter & Communications revenue grew 79% YoY and represented 82% of total revenue, led by AI datacenter demand.

• FY27 pro forma revenue growth is expected to exceed 60%; management targets a first $3B quarter by FY27-end and sees a first $4B quarter in FY28.

• Capacity investment and working-capital needs contributed to $92.7M of operating cash outflow alongside $775.5M of capital expenditures.

Financial highlights

• Revenue was $2,370.3M versus $1,581.4M a year earlier; pro forma comparisons exclude the divested Aerospace & Defense and Munich businesses.

• Non-GAAP diluted EPS was $2.09 versus $1.16; GAAP diluted EPS was $1.90 versus $1.19.

• GAAP gross margin was 39.1%, up 254 bps YoY; non-GAAP gross margin was 40.6%, up 184 bps.

• Non-GAAP operating income was $550.3M and operating margin was 23.2%, versus $309M and 19.5% YoY.

• Non-GAAP operating expenses were $412M, or 17.4% of revenue, versus $304M and 19.2% YoY.

Outlook and guidance

• Q2 FY27 guidance: revenue $2.55B–$2.75B; non-GAAP gross margin 40%–42%; operating expenses $430M–$450M; tax rate 18%–20%; diluted EPS $2.28–$2.48.

• FY27 pro forma revenue growth is expected to exceed 60%, more than double FY26’s rate; the first $3B quarter is targeted by FY27-end and the first $4B quarter in FY28.

• A quarterly non-GAAP gross margin above 45% is expected before CY28-end; management called 45% a waypoint, not a ceiling.

• PhotonLink revenue is expected to exceed $100M in the March 2027 quarter and $250M per quarter before CY27-end; scale-up CPO/NPO shipments are expected in late 2027 or early 2028.

• Industrial is expected to return to growth in Q2; Scale Across quarterly revenue is expected to roughly double from Q1 by CY27-end.