Market Overview - U.S. stock futures declined on Thursday following a positive close on Wednesday, with major benchmark indices showing lower futures [1] - The 10-year Treasury bond yielded 4.14%, while the two-year bond was at 3.61%, with a 67.3% likelihood of the Federal Reserve cutting interest rates in December [2] - Major indices' futures changes included Dow Jones -0.06%, S&P 500 -0.02%, Nasdaq 100 -0.06%, and Russell 2000 -0.19% [2] Company Performance - Coherent Corp. (NYSE:COHR) saw a significant increase of 14.31% after reporting revenue of $1.58 billion, a 17% year-over-year increase, and earnings of $1.16 per share compared to $0.67 from the same quarter last year [5] - Airbnb Inc. (NASDAQ:ABNB) rose 0.041% in premarket trading ahead of its earnings report, with expectations of $2.34 earnings per share on revenue of $4.08 billion [6] - Apple Inc. (NASDAQ:AAPL) fell 0.27% after news of a deal to pay Alphabet Inc. approximately $1 billion yearly for AI technology to improve Siri [6] - Marvell Technology Inc. (NASDAQ:MRVL) surged 8.55% amid reports of SoftBank Group exploring a potential takeover of the company [6] Sector Performance - Sectors with the biggest gains included communication services, consumer discretionary, and materials, while consumer staples and information technology closed lower [8] Analyst Insights - Sean Peche, founder of Ranmore Fund Management, expressed concerns about the stock market being overvalued, drawing parallels to Japan's late-1980s bubble, citing high valuations and euphoria driven by U.S. tech dominance [10][11] - Peche highlighted that the Magnificent 7 trades at 58x free cash flow, which worsens to 77x when adjusting for stock-based compensation, suggesting a reconsideration of reliance on the U.S. market [11][12] Upcoming Economic Data - Initial jobless claims data and third-quarter U.S. productivity data will be delayed, with several Federal Reserve officials scheduled to speak throughout the day [14][15] Commodities and Global Markets - Crude oil futures increased by 1.06% to around $60.23 per barrel, while Gold Spot rose 0.83% to approximately $4,012.21 per ounce [16] - Bitcoin traded 1.01% higher at $102,968.08 per coin [16] Global Market Performance - Asian markets closed higher, except for India's NIFTY 50 index, with notable gains in South Korea, Japan, Australia, Hong Kong, and China [17]

分组1 - Coherent reported quarterly earnings of $1.16 per share, exceeding the Zacks Consensus Estimate of $1.04 per share, and showing an increase from $0.74 per share a year ago, resulting in an earnings surprise of +11.54% [1] - The company achieved revenues of $1.58 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.94%, and up from $1.35 billion year-over-year [2] - Coherent has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] 分组2 - The stock has gained approximately 35.9% since the beginning of the year, significantly outperforming the S&P 500's gain of 15.1% [3] - The current consensus EPS estimate for the upcoming quarter is $1.11 on revenues of $1.56 billion, and for the current fiscal year, it is $4.59 on revenues of $6.34 billion [7] - The Technology Services industry, to which Coherent belongs, is currently ranked in the top 39% of over 250 Zacks industries, indicating a favorable outlook for the sector [8]

Financial Data and Key Metrics Changes - Revenue for Q1 2026 was a record $1.58 billion, up 3% sequentially and 17% year-over-year, driven by growth in AI data center and communications demand [24][25] - Non-GAAP gross margin improved to 38.7%, a 70 basis point increase from the prior quarter and a 200 basis point increase year-over-year [25] - Non-GAAP EPS was $1.16, compared to $1.00 in the prior quarter and $0.67 in the year-ago quarter, reflecting a 16% sequential growth and 73% year-over-year growth [27] Business Line Data and Key Metrics Changes - Data center and communications segment revenue grew by 7% sequentially and 26% year-over-year, with data center revenue increasing by 4% sequentially and 23% year-over-year [6][17] - Communications market revenue grew 11% sequentially and 55% year-over-year, driven by strong demand for data center interconnect products [17] - Industrial segment revenue grew 2% quarter-over-quarter and 4% year-over-year on a pro forma basis, with expectations for stability in the current quarter [19] Market Data and Key Metrics Changes - The company is experiencing unprecedented demand for optical networking products, particularly in AI data centers, with record bookings indicating strong future growth [5][8] - Strong demand for both 800 gig and 1.6T transceivers is noted, with expectations for significant growth in calendar 2026 [9][14] - The optical circuit switch (OCS) platform is expected to add over $2 billion of addressable market opportunity, with growing customer engagement [15][16] Company Strategy and Development Direction - The company is focused on streamlining its portfolio and concentrating investments in areas with the greatest long-term growth potential, having divested its aerospace and defense business [20][21] - Continued expansion of production capacity for transceiver modules and key optical components is a priority to meet strong demand [10][12] - The company aims for a gross margin target of greater than 42%, with ongoing cost reduction and pricing optimization initiatives [25][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong sequential revenue growth throughout the fiscal year, driven by robust demand in the data center and communications segments [5][24] - The company anticipates continued strong demand for its products, with significant improvements in supply chain capacity expected [10][36] - Management remains cautious about near-term demand in the industrial segment due to macroeconomic factors but expects stability [19] Other Important Information - The company has sold or exited 23 sites over the past five quarters as part of its portfolio optimization initiative [23] - The proceeds from divestitures are being used to pay down debt, significantly reducing the debt leverage ratio to 1.7 times [27][28] - The company is ramping production of 6-inch indium phosphide, which is expected to enhance gross margins due to lower production costs [11][52] Q&A Session Summary Question: Can you elaborate on the demand side and its breadth? - Management indicated very strong demand across both data center and communications, with record bookings extending well into the future, providing good visibility for planning [31][32] Question: What milestones should investors watch regarding indium phosphide capacity? - Key milestones include the ramping of production at two sites, with initial yields from the 6-inch indium phosphide production exceeding expectations [34][35] Question: How does the company view its position in the OCS market? - The company feels confident about its technology differentiation and expects meaningful revenue contributions from OCS in the coming years, with a steady ramp anticipated [38][39] Question: What is the outlook for the 1.6T transceivers? - The company expects a balanced ramp across multiple customers for 1.6T transceivers, with strong engagement and accelerated timelines from several customers [57][58]

Q1 FY2026 Performance Highlights - Revenue reached $1.58 billion in Q1 FY26, a 17% increase compared to $1.35 billion in Q1 FY25 [6] - Gross margin was 38.7% in Q1 FY26, a 200 basis point increase from 36.7% in Q1 FY25 [6] - Earnings per share (EPS) was $1.16 in Q1 FY26, a 73% increase compared to $0.67 in Q1 FY25 [6] Revenue Segmentation - Datacenter & Communications accounted for 69% of the revenue in Q1 FY26 [6, 10] - Industrial segment accounted for 31% of the revenue in Q1 FY26 [6, 10] - Datacenter and Communications revenue was $1.09 billion in Q1 FY26 [9] - Industrial revenue was $491 million in Q1 FY26 [9] Q2 FY2026 Outlook - Revenue is projected to be between $1.56 billion and $1.70 billion [14] - Non-GAAP gross margin is expected to be between 38% and 40% [14] - Non-GAAP operating expenses are projected to be between $300 million and $320 million [14] - Non-GAAP EPS is expected to be between $1.10 and $1.30 [14]

Financial Performance - Total revenues for the three months ended September 30, 2025, increased 17% to $1,581 million, compared to $1,348 million for the same period last fiscal year [129]. - Gross margin for the three months ended September 30, 2025, was $579 million, or 37% of total revenues, an increase of 252 basis points from 34% in the same period last fiscal year [130]. - Revenues for the Datacenter & Communications segment increased 26% to $1,090 million in Q3 2025, driven by strong AI datacenter demand [142]. - Segment profit for Datacenter & Communications rose 23% to $269 million in Q3 2025, supported by higher revenues despite increased R&D investments [143]. - Industrial segment revenues increased 1% to $491 million in Q3 2025, with growth in precision manufacturing and automotive markets [144]. - Industrial segment profit surged 69% to $117 million in Q3 2025, attributed to lower manufacturing costs and favorable product mix [145]. Expenses - Research and development expenses for the three months ended September 30, 2025, were $155 million, or 10% of revenues, up from $132 million, also 10% of revenues, in the same period last fiscal year [131]. - Selling, general and administrative expenses for the three months ended September 30, 2025, were $252 million, or 16% of revenues, compared to $229 million, or 17% of revenues, for the same period last fiscal year [132]. - Restructuring charges for Q3 2025 were $19 million, down from $24 million in Q3 2024, primarily due to employee termination and move costs [133]. - Impairment of assets held-for-sale for Q3 2025 was $9 million, representing 1% of revenues, aimed at reducing carrying value to estimated fair value [134]. Restructuring and Impairment - Restructuring activities in the three months ended September 30, 2025, resulted in charges of $19 million, with total charges for fiscal 2025 amounting to $107 million [118]. - The company expects restructuring actions to be substantially completed by the end of fiscal 2026, although actual timing and costs may differ from current estimates [118]. - Non-cash impairment charges of $85 million were recorded in the fourth quarter of fiscal 2025 due to the classification of certain entities as held-for-sale [120]. - Gain on sale of business for Q3 2025 was $115 million, or 7% of revenues, from the sale of the aerospace and defense business [135]. Cash Flow and Debt - Net cash provided by operating activities was $46 million in Q3 2025, a decrease from $153 million in Q3 2024, due to higher inventories and accounts receivable [148]. - Net cash provided by investing activities was $297 million in Q3 2025, primarily from $391 million received from the sale of a business [149]. - As of September 30, 2025, total debt obligations were $3,308 million, down from $3,687 million in June 2025 [153]. - As of September 30, 2025, total borrowings include variable rate borrowings, exposing the company to interest rate changes [159]. Interest Rate Management - An interest rate cap was entered into on February 23, 2022, and amended on March 20, 2023, with an effective date of July 1, 2023 [159]. - The notional amount of the interest rate cap was increased from $500 million to $1,500 million on September 1, 2024 [159]. - Without effective hedging, a 100 basis point change in interest rates would have resulted in an additional interest expense of $7 million for the three months ended September 30, 2025 [159].

Exhibit 99.1 Coherent Corp. 375 Saxonburg Blvd. Saxonburg, PA 16056-9499 PRESS RELEASE COHERENT CORP. REPORTS FIRST QUARTER FISCAL 2026 RESULTS SAXONBURG, Pa., November 5, 2025 (GLOBE NEWSWIRE) – Coherent Corp. (NYSE: COHR) ("Coherent," "We," or the "Company"), a global leader in photonics, announced financial results today for its first quarter of fiscal year 2026 ended September 30, 2025. Revenue for the first quarter of fiscal 2026 was $1.58 billion, with GAAP gross margin of 36.6% and GAAP net income of ...

Core Insights - Coherent Corp. reported a revenue of $1.58 billion for Q1 FY26, reflecting a year-over-year growth of 17.3% and a pro forma growth of 19% driven by demand from AI-related datacenters and communications [1][4][2] - The company achieved a GAAP gross margin of 36.6% and a non-GAAP gross margin of 38.7%, both showing significant year-over-year improvements [1][4] - GAAP net income per diluted share was $1.19, while non-GAAP net income per diluted share was $1.16, indicating substantial growth compared to the previous year [1][4] Financial Performance - Revenue for Q1 FY26 was $1,581 million, up 3.4% quarter-over-quarter and 17.3% year-over-year [3][5] - GAAP gross margin increased by 249 basis points year-over-year to 36.6%, while non-GAAP gross margin improved by 200 basis points to 38.7% [4][5] - Operating income surged to $259 million, a 4147.5% increase quarter-over-quarter and a 244.5% increase year-over-year [3][5] - Net earnings attributable to Coherent Corp. were $226 million, a significant recovery from a loss of $96 million in the previous quarter [3][5] Debt Management - The company paid down $400 million of its debt during the quarter and refinanced its debt to reduce interest expenses, strengthening its balance sheet [2][4] Business Developments - Coherent closed the sale of its Aerospace and Defense business, which is expected to be accretive to both gross margin and EPS [7] - The company introduced a new high-power 400 mW CW laser for Co-Packaged Optics and Silicon Photonic Designs, currently being sampled to multiple customers [7] - Coherent received the ECOC'25 Award for the Most Innovative Photonic Component, highlighting its advancements in optical technology [7] Outlook - For Q2 FY26, revenue is projected to be between $1.56 billion and $1.70 billion, with a non-GAAP gross margin expected between 38% and 40% [13] - Total operating expenses for Q2 FY26 are anticipated to be between $300 million and $320 million on a non-GAAP basis [13]

Industry Overview - The Technology Services industry has experienced significant growth since the pandemic, driven by the rapid adoption of remote work and advancements in technology such as 5G, blockchain, AI, and ML [1] - The industry includes companies that produce, develop, and design software support, data processing, computing hardware, and communications equipment, catering to both consumer and business markets [2] Future Prospects - The demand for services in the industry remains healthy, with revenues and cash flows expected to return to pre-pandemic levels, supporting stable dividends for most players [3] - The sector benefits from broader economic recovery, with GDP growing at an annual rate of 3.8% in Q2 2025 and a Services PMI remaining above 50% for 11 of the past 13 months [4] Technological Advancements - The global shift towards digitization presents opportunities in markets such as 5G, blockchain, and AI, with the GenAI market projected to reach $59 billion by 2025 and a CAGR of 37.6% from 2025 to 2031 [5] Market Performance - The Zacks Technology Services industry ranks 94, placing it in the top 39% of over 243 Zacks industries, indicating strong near-term prospects [6][7] - Over the past year, the industry has outperformed the broader Zacks Business Services sector, increasing by 53% compared to a 7.5% decline in the sector and a 17.9% rise in the S&P 500 [8] Current Valuation - The industry is currently trading at an EV-to-EBITDA ratio of 17.19X, compared to the S&P 500's 18.33X and the sector's 10.49X, with a five-year trading range of 8.85X to 17.19X [11] Company Highlights Futu Holdings - Futu Holdings, a digital securities brokerage, reported a 69.7% year-over-year revenue increase in Q2 2025, with a significant operating margin expansion [16] - The company added 262,000 funded accounts, reaching a total of 2.7 million, with a 42% year-over-year growth in funded accounts [17] - Futu Holdings has a Zacks Rank 1 (Strong Buy), with earnings expected to grow 74.7% year-over-year in 2025 [18] Dave - Dave, a financial services platform, added 843,000 members, resulting in a 60% year-over-year revenue increase in Q3 2025 [19] - The company raised its full-year revenue guidance to $544-$547 million, up from $505-$515 million [21] - Dave holds a Zacks Rank 1, with earnings expected to soar 98.5% year-over-year in 2025 [22] Coherent Corp. - Coherent Corp. experienced a 16.4% year-over-year revenue growth in Q4 2025, driven by demand for 800G transceivers [23] - The company introduced a new 1.6T transceiver, contributing to improved profitability with a non-GAAP gross margin increase of 290 basis points [24] - Coherent has a Zacks Rank 2 (Buy), with earnings expected to rise 30% year-over-year in fiscal 2026 [25]

Core Insights - The article emphasizes the importance of understanding macro trends and their influence on asset prices and investor behavior [1] - It highlights the significance of sharing insights and building confidence in long-term investing among investors [1] Group 1: Professional Background - The expert has over 10 years of experience in asset management, focusing on equity analysis, macroeconomics, and risk-managed portfolio construction [1] - The professional background includes advising on and implementing multi-asset strategies, with a strong emphasis on equities and derivatives [1] Group 2: Investment Philosophy - The article advocates for accessible, inspiring, and empowering investing, aiming to help investors build confidence [1] - It encourages readers to conduct their own research before making investment decisions, emphasizing the importance of informed decision-making [1]

Core Insights - JPMorgan assisted Coherent Corp in refinancing its debt with a $1.25 billion private credit loan and a $700 million revolving credit facility, incorporating a "J.Crew blocker" clause in the deal [1] - The prevalence of "J.Crew blockers" in private credit deals has surged, with 45% of such deals in Q3 2025 including this clause, up from 26% the previous year and 15% at the start of 2023 [3] - Lenders are tightening legal terms in private credit deals, indicating a cautious approach towards potential future distress in credit markets, despite current default rates being normal [4][5] Private Credit Market Trends - The rise of "J.Crew blockers" reflects a growing trend among lenders to protect their interests in the event of borrower distress [3] - The introduction of "anti-Petsmart" language in credit agreements signifies lenders' increasing concern over asset protection and borrower behavior, following past incidents where companies maneuvered assets to evade creditor claims [5]