Coherent (COHR) Q3 2026 earnings summary

Executive summary

• Q3 FY26 revenue reached $1.81B, up 21% year-over-year and 27% on a pro forma basis, driven by strong datacenter and communications demand, particularly from AI infrastructure investments.

• Non-GAAP gross margin expanded to 39.6%, up 105 bps year-over-year; GAAP gross margin improved to 37.7%.

• Non-GAAP EPS was $1.41, up 55% year-over-year; GAAP EPS was $0.97, up $1.08 year-over-year.

• Strategic partnership with NVIDIA includes a $2B equity investment and multi-year supply agreement for advanced AI datacenter products.

• Entered the S&P 500, reflecting increased scale and market leadership.

Financial highlights

• Q3 revenue: $1.81B, up 21% year-over-year and 7% sequentially; pro forma revenue up 27% year-over-year, excluding divested businesses.

• Non-GAAP gross margin: 39.6%; GAAP gross margin: 37.7%.

• Non-GAAP operating margin: 20.3%; GAAP operating margin: 11.1%.

• Non-GAAP net earnings: $276M; GAAP net earnings: $191M.

• Cash and equivalents at quarter-end: $1.59B; cash balance rose mainly from NVIDIA's $2B investment.

Outlook and guidance

• Q4 FY26 revenue expected between $1.91B and $2.05B.

• Non-GAAP gross margin guidance: 39%–41%; operating expenses $360M–$380M; tax rate 18%–20%.

• Non-GAAP EPS guidance: $1.52–$1.72.

• Fiscal 2027 growth rate expected to exceed fiscal 2026.

• Restructuring actions expected to be substantially completed by end of fiscal 2026.