Coherent (COHR) Q2 2025 earnings summary

Executive summary

• Achieved record Q2 FY25 revenue of $1.43B, up 27% year-over-year and 6–10% sequentially, driven by strong AI datacenter and telecom demand.

• Non-GAAP gross margin improved to 38.2% (up 363 bps YoY); non-GAAP EPS reached $0.95, more than tripling year-over-year.

• Paid down $132M in debt, strengthening the balance sheet.

• Expanded customer engagements for high-speed transceivers and shipped industry-first excimer laser annealing system for Gen 8 OLED fab.

• Secured U.S. government CHIPS Act funding to expand indium phosphide production capacity.

Financial highlights

• Q2 revenue: $1.43B (+27% YoY); non-GAAP gross margin: 38.2%; non-GAAP operating margin: 18.5%.

• Non-GAAP EPS: $0.95 (vs. $0.27 YoY); GAAP EPS: $0.44 (vs. -$0.38 YoY).

• Six-month revenue: $2.78B, up 27% YoY; six-month GAAP net income: $129M (vs. -$95M YoY).

• Operating cash flow for six months: $340M, up from $266M YoY.

• Paid down $132M in debt during Q2.

Outlook and guidance

• Q3 FY25 revenue expected between $1.39B and $1.48B.

• Non-GAAP gross margin guidance: 37%–39%; operating expenses: $285M–$305M; tax rate: 17%–19%.

• Non-GAAP EPS expected between $0.75 and $0.95.

• Management expects restructuring actions to be substantially completed by end of fiscal 2025.

• Continued focus on gross margin expansion, operational efficiency, and strategic investments.