Coherent (COHR) Q3 2025 earnings summary

Executive summary

• Q3 FY25 revenue reached $1.50B, up 24% year-over-year, driven by strong AI datacenter and telecom demand, and new optical networking products.

• Non-GAAP gross margin improved to 38.5% (up 490 bps Y/Y); GAAP gross margin was 35.2%.

• Non-GAAP EPS rose to $0.91, up 141% year-over-year; GAAP EPS was $(0.11), an $0.18 improvement Y/Y.

• Multiple new optical networking products launched, including 1.6T/3.2T transceivers and 400G EML; six product awards at OFC 2025.

• Strategic portfolio optimization and restructuring underway, including site consolidations, workforce reductions, and asset divestitures.

Financial highlights

• Q3 FY25 revenue: $1.50B (+24% Y/Y); nine months: $4.28B (+26% Y/Y).

• Q3 FY25 non-GAAP operating margin: 18.6% (up from 12.6% Y/Y); GAAP operating margin: 4.8%.

• Q3 FY25 non-GAAP net earnings: $185M; GAAP net earnings: $16M.

• Operating cash flow for nine months: $503M; cash and equivalents at quarter end: $890M.

• Paid down $136M in debt in Q3; $386M fiscal year-to-date.

Outlook and guidance

• Q4 FY25 revenue expected between $1.425B and $1.575B.

• Q4 FY25 non-GAAP gross margin guidance: 37%–39%.

• Q4 FY25 non-GAAP EPS expected between $0.81 and $1.01.

• Q4 FY25 non-GAAP operating expenses projected at $290M–$310M; tax rate between 21% and 24%.

• Tariff and trade impacts expected to be insignificant in Q4 under current policy.