Coherent (COHR) Q4 2026 earnings summary

Executive summary

• Achieved record revenue of $7.12 billion in fiscal 2026, up 23% from 2025 and 28% on a pro forma basis, driven by strong AI data center and communications demand.

• Q4 revenue reached $2.05 billion, up 13% sequentially and 34% year-over-year, with pro forma growth of 14% sequentially and 42% year-over-year.

• Non-GAAP EPS grew 59% for the year and 74% year-over-year in Q4, outpacing revenue growth due to gross margin expansion and operating leverage.

• Datacenter & Communications segment accounted for 79% of Q4 revenue, growing 59% year-over-year.

• Entering fiscal 2027 with record backlog, strong customer demand, and high visibility, expecting to surpass $3 billion in quarterly revenue by year-end.

Financial highlights

• Full year non-GAAP gross margin was 39.4%, up 152 basis points from 2025; Q4 gross margin was 40.2%, up 66 basis points sequentially and 215 basis points year-over-year.

• Non-GAAP operating margin for FY 2026 was 20.5%, up from 17.8% in FY 2025; Q4 operating margin was 21.8%.

• FY 2026 non-GAAP EPS was $5.61, up 59% from FY 2025; Q4 non-GAAP EPS was $1.74, up 23% sequentially and 74% year-over-year.

• Year-end cash balance was $2.59 billion, down from $3.05 billion in the prior quarter but up from $1.63 billion at FY 2025 end.

• Full-year GAAP net income was $805M; non-GAAP net income was $1.10B.

Outlook and guidance

• Fiscal Q1 2027 revenue expected between $2.2 billion and $2.4 billion.

• Non-GAAP gross margin guidance for Q1 is 39.5% to 41.5%; operating expenses expected between $400 million and $420 million.

• Non-GAAP EPS guidance for Q1 is $1.85 to $2.05; non-GAAP tax rate expected to be 18% to 20%.

• Expecting continued gross margin expansion and operating leverage, with new product ramps (1.6T, OCS, CPO, multi-rail) driving growth.