Investment Rating - The report maintains an "Outperform" rating for the communication industry, indicating expected growth exceeding the benchmark index by over 10% [1]. Core Insights - The North American optical communication companies such as Coherent, Lumentum, AAOI, Fabrinet, and Macom have shown significant revenue growth, particularly in optical modules and related products, suggesting a strong rebound in the second quarter [2][3][4][5][6][7]. - The demand for optical communication is driven by the growth of AI data centers and telecommunications, with companies like Coherent and Lumentum reporting substantial increases in revenue due to these sectors [3][4][5][6]. - The ongoing geopolitical tensions, such as the India-Pakistan conflict, have heightened confidence in defense equipment and military communication capabilities, which are expected to see increased demand [8]. Summary by Sections Industry Dynamics - Coherent reported Q3 2025 revenue of $1.5 billion, a 24% year-on-year increase, with 60% of this from the communication market, which grew by 46% [3][16]. - Lumentum's Q3 2025 revenue reached $425.2 million, up 16% year-on-year, driven by hyperscale cloud growth [4][17]. - Fabrinet's Q3 2025 revenue was $872 million, a 19.2% increase, with optical communication revenue at $657 million, up 11.1% [5][18]. - AAOI's Q1 2025 revenue surged to $99.9 million, a 145% increase, largely due to strong CATV market demand [6][19]. - Macom's Q2 2025 revenue was $236 million, a 30% increase, with data center market revenue up 67.3% [7][20]. Investment Recommendations - The report suggests focusing on companies in the optical communication sector, including Zhongji Xuchuang, Xinyi Technology, and Shijia Photon [9][22]. - It also highlights companies in copper connections and military communication sectors as potential investment opportunities [22]. Market Overview - The overall market performance from May 6 to May 9, 2025, showed mixed results, with the Shenwan Communication Index up by 4.96% [22]. - The optical module sector led the gains with a 15.3% increase, followed by controllers and liquid cooling technologies [22][23]. Notable Trends - The report emphasizes the resilience of the optical communication market, driven by the increasing demand for AI-related applications and private cloud deployments [20][21]. - The military communication sector is expected to benefit from advancements in technology and increased defense spending, particularly in the context of recent military conflicts [8][21].

Core Viewpoint - Coherent Corp. (COHR) has experienced significant stock price appreciation over the past year, outperforming its industry and peers, but faces challenges from geopolitical risks and potential delays in hyperscaler investments [1][3][15]. Stock Performance - COHR's stock price has increased by 37.3% over the past year, compared to a 31.2% rise in the industry and a 9.2% gain in the Zacks S&P 500 Composite [1]. - In the past month, COHR's stock gained 38.5%, surpassing the industry's 22.3% increase, while peers Crane NXT and Jamf saw increases of 21.4% and 6.6%, respectively [3]. Geopolitical Risks - Coherent relies on international supply chains, making it vulnerable to geopolitical tensions, particularly between the United States and China, which could disrupt material procurement and manufacturing [7][8]. - Potential tariffs could increase COHR's cost of goods, impacting profitability and the ability to meet consumer demand [7][8][9]. Impact of Hyperscaler Investments - In Q3 of fiscal 2025, COHR reported a 24% year-over-year growth in revenue, driven by demand for AI-related data center products, heavily reliant on investments from hyperscalers [10]. - The current volatility in the AI market may deter hyperscalers from investing in infrastructure, potentially slowing COHR's revenue growth in the datacom segment [11]. Dividend Policy - Coherent has no plans to pay cash dividends, which may deter investors seeking immediate returns, as the only potential benefit comes from share price appreciation [12]. Earnings Estimates - Over the past 60 days, one earnings estimate for fiscal 2025 has been revised downward, with the Zacks Consensus Estimate for fiscal 2025 earnings declining slightly [13]. - For fiscal 2026, similar downward revisions have occurred, indicating cautious sentiment regarding future earnings [13]. Investment Recommendation - Given the challenges posed by geopolitical risks, potential tariffs, and delays in hyperscaler investments, it may be prudent for current investors to consider selling their shares to realize profits [15].

Group 1 - Coherent (NYSE: COHR) is the world's largest optical, laser, and photonics company, showing strong results in its data center vertical for several quarters [1] - The company's performance in the data center segment is currently underappreciated by investors, leading to a mispricing of its stock [1] - The investment focus is on growth companies, particularly in mid-cap segments, with an emphasis on sectors such as biotechnologies, computer chips, cloud technology, energy, and commodities [1] Group 2 - A systematic balance sheet analysis will be conducted, as growing businesses often struggle with funding [1] - A stress test will be employed to evaluate the safety of the business models being analyzed [1] - The investment strategy prioritizes long-term capital appreciation over short-term speculation [1]

Core Insights - Coherent reported a revenue of $1.5 billion for the quarter ended March 2025, reflecting a year-over-year increase of 23.9% and exceeding the Zacks Consensus Estimate of $1.44 billion by 3.97% [1] - The company's EPS for the quarter was $0.91, up from $0.53 in the same quarter last year, surpassing the consensus EPS estimate of $0.86 by 5.81% [1] Revenue Performance - Revenue from Materials was $236.70 million, slightly above the estimated $236.16 million, but down 1% year-over-year [4] - Networking revenues reached $897.30 million, exceeding the average estimate of $842.47 million, marking a significant year-over-year increase of 45% [4] - Lasers generated $363.90 million in revenue, slightly above the estimated $359.34 million, with a year-over-year growth of 3.7% [4] - Instrumentation revenue was $95.62 million, below the average estimate of $100.73 million, representing a decline of 2.7% year-over-year [4] - Communications revenue was $896.99 million, surpassing the estimate of $835.13 million, with a year-over-year increase of 45.7% [4] - Industrial revenue was $439.55 million, slightly above the estimated $429.76 million, reflecting a 4.4% year-over-year increase [4] - Electronics revenue was $65.72 million, below the average estimate of $72.64 million, indicating a year-over-year decline of 10.7% [4] Stock Performance - Coherent's shares have returned +35.8% over the past month, significantly outperforming the Zacks S&P 500 composite's +10.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - Coherent (COHR) reported quarterly earnings of $0.91 per share, exceeding the Zacks Consensus Estimate of $0.86 per share, and showing an increase from $0.53 per share a year ago, representing an earnings surprise of 5.81% [1] - The company achieved revenues of $1.5 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.97%, and up from $1.21 billion year-over-year [2] - Coherent has consistently surpassed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The future performance of Coherent's stock will largely depend on management's commentary during the earnings call and the sustainability of the stock's immediate price movement based on the recent earnings numbers [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.92 on revenues of $1.48 billion, and for the current fiscal year, it is $3.47 on revenues of $5.7 billion [7] Industry Context - The Technology Services industry, to which Coherent belongs, is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of Coherent's stock may also be influenced by the overall industry outlook, as empirical research shows a strong correlation between near-term stock movements and earnings estimate revisions [5][8]

美国光学材料和半导体制造商相干公司（COHR）美股盘后一度下跌超4.12%。 最新业绩报告显示，该公司第三财季每股亏损0.11美元，上年同期亏损0.29美元。 第三财季调整后EPS为0.91美元，分析师预期0.86美元。 第三财季营收15.0亿美元，分析师预期14.4亿美元。 预计第四财季调整后EPS为0.81-1.01美元，分析师预期0.90美元。 预计第四财季营收14.3亿-15.8亿美元，分析师预期14.7亿美元。 ...

Financial Data and Key Metrics Changes - Fiscal Q3 revenue reached a record $1,500 million, increasing approximately 4% sequentially and 24% year over year [8][23] - Non-GAAP gross margin improved to 38.5%, up 30 basis points sequentially and 490 basis points year over year [25][26] - Non-GAAP EPS increased 2.4 times year over year [9] Business Line Data and Key Metrics Changes - Networking revenue increased 10% sequentially and 45% year over year, driven by strong AI data center demand [23] - Lasers segment revenue decreased 3% sequentially but increased 4% year over year, primarily due to demand for excimer annealing lasers [24] - Materials segment revenue decreased 3% sequentially and 1% year over year, attributed to softness in the consumer electronics market [24] Market Data and Key Metrics Changes - Data center revenue grew 11% sequentially and 54% year over year, reflecting strong AI data center demand [9][15] - Telecom revenue increased 2% sequentially and 21% year over year, with growth driven by data center interconnect and traditional transport markets [15][17] - Industrial-related markets saw a stable aggregate revenue with a decrease of 2% sequentially and an increase of 1% year over year [17] Company Strategy and Development Direction - The company is focusing on strategic portfolio optimization, including exiting non-core product lines and streamlining assets [18][19] - Continued investment in core growth areas is emphasized to accelerate shareholder value creation [20] - The company plans to introduce a six-inch indium phosphide platform to enhance production capacity and reduce costs [14] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious near-term view on end market demand due to macroeconomic uncertainty but remains optimistic about fiscal 2025 being a strong growth year [22][30] - The company is well-positioned for long-term growth, with a focus on innovation and new product introductions [22][30] Other Important Information - The company paid down $136 million in debt during the quarter, reducing debt leverage to 2.1 times [28] - Guidance for Q4 revenue is expected to be between $1,425 million and $1,575 million, with non-GAAP gross margin projected between 37% and 39% [28][29] Q&A Session Summary Question: Insights on product announcements and their revenue impact - Management highlighted significant product announcements at OFC, including three versions of a 1.6T transceiver, with revenue expected to ramp in the current calendar year [34][37] Question: Impact of tariffs and manufacturing flexibility - Management noted that the current tariff environment is not expected to significantly impact financials, emphasizing a resilient and adaptable supply chain with over 60 production facilities worldwide [40][42] Question: Trends in 800G demand and inventory levels - Demand for 800G remains strong, with no significant inventory issues observed as customers deploy transceivers quickly after shipment [47][49] Question: Mix of technologies in data center revenue - Over half of transceiver revenue comes from EML-based products, with a growing portion from silicon photonics, countering perceptions of over-dependence on VCSELs [52][54] Question: Guidance for segment performance - Management expects data center and communications segments to show sequential growth, while industrial-related markets may see a decline due to macro uncertainties [60] Question: Silicon carbide business exit and revenue impact - The discontinued silicon carbide devices and modules were largely pre-revenue, with ongoing focus on substrate and epi production where demand is strong [65][66] Question: Factors affecting gross margin in Q4 - Mix is expected to be the primary driver affecting gross margin, with ongoing efforts in cost reductions and pricing optimization [78][79]

Financial Data and Key Metrics Changes - The company's fiscal Q3 revenue reached a record $1.5 billion, representing a 4% sequential increase and a 24% year-over-year increase, driven by strong AI data center and telecom revenue growth [5][21]. - Non-GAAP gross margin improved to 38.5%, up 30 basis points sequentially and 490 basis points year-over-year [22][23]. - Non-GAAP EPS increased 2.4 times year-over-year, reflecting strong revenue growth and gross margin expansion [6]. Business Line Data and Key Metrics Changes - Networking revenue increased by 10% sequentially and 45% year-over-year, primarily due to strong AI data center demand [21]. - Lasers segment revenue decreased by 3% sequentially but increased by 4% year-over-year, driven by demand for excimer annealing lasers [22]. - Materials segment revenue decreased by 3% sequentially and 1% year-over-year, attributed to softness in the consumer electronics market [22]. Market Data and Key Metrics Changes - Data center revenue grew by 11% sequentially and 54% year-over-year, achieving record Q3 revenue due to strong AI data center demand [6][13]. - Telecom revenue increased by 2% sequentially and 21% year-over-year, with growth driven by data center interconnect and improvements in the traditional transport market [13][21]. - Industrial-related markets saw a stable aggregate revenue with a 2% sequential decrease and a 1% year-over-year increase [14]. Company Strategy and Development Direction - The company is focusing on strategic portfolio optimization, including exiting non-core product lines and streamlining its asset base [16][17]. - Continued investment in core growth areas is emphasized to accelerate long-term shareholder value creation [18]. - The company is also expanding its indium phosphide capacity to meet rising demand for optical networking solutions [11][12]. Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious near-term view on end market demand due to macroeconomic uncertainty but remains optimistic about fiscal 2025 being a strong growth year [20]. - The company is well-positioned for long-term growth, with a focus on innovation and new product introductions [19][20]. - Management noted that the impact of current tariff policies is not expected to be significant, highlighting the company's supply chain resiliency [18][39]. Other Important Information - The company incurred $74 million in restructuring costs related to portfolio optimization actions, including site closures and workforce reductions [24]. - The upcoming Investor Day is scheduled for May 28, where the company will outline its overall strategy and long-term financial model [28]. Q&A Session Summary Question: Significance of recent product announcements and their revenue impact - Management highlighted the introduction of multiple new products at the Optical Fiber Communications Conference, including various 1.6T transceiver designs, which are expected to ramp revenue in the current calendar year [30][32][36]. Question: Impact of tariffs and manufacturing flexibility - Management stated that the current tariff environment is not expected to significantly impact financials, emphasizing the company's resilient and adaptable supply chain with over 60 production facilities worldwide [39][41]. Question: Trends in 800G demand and inventory levels - Demand for 800G transceivers remains strong, with customers deploying products quickly after shipment, indicating no significant inventory issues [46][48]. Question: Mix of technologies in data center revenue - Over half of the company's transceiver revenue comes from EML-based transceivers, with a growing portion from silicon photonics, countering perceptions of over-dependence on VCSELs [51][53]. Question: Guidance for the upcoming quarter - The company expects sequential growth in data center and communications while taking a cautious view on industrial-related markets due to macroeconomic uncertainties [60]. Question: Silicon carbide business exit and revenue impact - The discontinued silicon carbide devices and modules were largely pre-revenue, with ongoing focus on substrate and epi production where demand is strong [65][66]. Question: Gross margin outlook and contributing factors - The gross margin guidance incorporates potential mix headwinds, with ongoing focus on cost reductions and pricing optimization as key drivers for improvement [78][79].

INVESTOR PRESENTATION Third Quarter Fiscal 2025 May 7, 2025 Copyright 2025, Coherent. All rights reserved. 1 FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements relating to future events and expectations, including our expectations regarding our estimates and projections for our business outlook for the fourth quarter of fiscal 2025, each of which is based on certain assumptions and contingencies. The forward-looking statements are made pursuant to the safe harbor provisions of ...

Core Viewpoint - Coherent Corp. reported strong financial results for the third quarter of fiscal 2025, driven by significant demand in AI-related datacenter products and the introduction of new optical networking technologies [1][2][5]. Financial Performance - Revenue for Q3 FY2025 was $1.50 billion, representing a year-over-year increase of 24% [5][19]. - GAAP gross margin was 35.2%, up 491 basis points year-over-year, while non-GAAP gross margin was 38.5%, an increase of 490 basis points year-over-year [5][19]. - The company reported a GAAP net loss of $0.11 per diluted share, an improvement of $0.18 year-over-year, and a non-GAAP net income of $0.91 per diluted share, up $0.53 year-over-year [5][19]. Operational Highlights - The company paid down $136 million of its outstanding debt, emphasizing cash and capital allocation as priorities [2]. - Operating income for Q3 FY2025 was $72 million, a decrease of 47.6% quarter-over-quarter but a significant increase of 222% year-over-year [19]. - Total operating expenses for Q3 FY2025 were $456 million, a 22.4% increase year-over-year [19]. Product and Market Developments - Coherent was recognized as an NVIDIA Ecosystem Innovation Partner, collaborating on silicon photonics and co-packaged optics for AI infrastructure [8]. - The company received six Product Innovation Awards at the Optical Fiber Communication Conference 2025, highlighting its advancements in datacenter and communications technologies [8]. - Coherent demonstrated groundbreaking technologies, including a 400G EML for next-generation transceivers and a portfolio of co-packaged optics solutions [8][9]. Business Outlook - For Q4 FY2025, revenue is expected to range between $1.425 billion and $1.575 billion, with a non-GAAP gross margin percentage anticipated between 37% and 39% [15]. - Total operating expenses for Q4 FY2025 are projected to be between $290 million and $310 million on a non-GAAP basis [15].