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]

Core Viewpoint - Coherent Corp. has entered into a definitive agreement to sell its materials processing tools division to Bystronic, aiming to reduce debt and enhance earnings per share (EPS) [1][2]. Group 1: Transaction Details - The materials processing business unit employs approximately 400 people and generates around $100 million in annual sales [2]. - The transaction is expected to close in early 2026, pending customary closing conditions [3]. Group 2: Strategic Focus - The sale is part of Coherent's strategy to concentrate on core growth markets and products, as stated by the CEO Jim Anderson [2]. - The proceeds from the sale will be utilized to reduce the company's debt, which will be immediately accretive to Coherent's EPS [1]. Group 3: Company Overview - Coherent is recognized as a global leader in photonics, providing technology solutions for data centers, communications, and industrial markets [4]. - The company has been operational since 1971 and has a presence in over 20 countries, offering a broad technology stack and supply chain resilience [5].

Core Insights - Coherent Corp. (COHR) is set to release its first-quarter fiscal 2026 results on November 5, after market close, with a strong earnings surprise history, averaging 16.6% over the last four quarters [1]. Financial Expectations - The Zacks Consensus Estimate for total revenue is projected at $1.5 billion, reflecting a 14% increase compared to the same quarter last year [2]. - The Networking segment is expected to generate $972.2 million, indicating a growth of 19.2% year-over-year, driven by investments in AI and cloud computing infrastructure, along with increased demand for high-speed products [3]. - The Materials segment's revenue estimate stands at $232.1 million, suggesting a decline of 4.7% from the previous year, while the Lasers segment is estimated at $339 million, indicating a 9.7% year-over-year decrease [4]. - Earnings per share (EPS) is anticipated to be $1.04, representing a significant year-over-year increase of 40.5%, supported by margin expansion from the Networking segment's revenue growth [4]. Earnings Prediction Model - Current analysis indicates that Coherent Corp. does not have a definitive prediction for an earnings beat this quarter, with an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold) [5].

Core Insights - Diamond Hill Capital's "Select Fund" underperformed the Russell 3000 Index in Q3 2025, returning 4.98% compared to the index's 8% gain [1] - Coherent Corp. (NYSE:COHR) was highlighted as a top contributor, with a one-month return of 22.40% and a 52-week gain of 49.35% [2][3] Company Performance - Coherent Corp. closed at $138.06 per share on October 29, 2025, with a market capitalization of $21.666 billion [2] - The company is experiencing strong demand for its data center-related products, particularly optical transceivers, which is driving its growth [3] Hedge Fund Interest - Coherent Corp. was held by 66 hedge fund portfolios at the end of Q2 2025, an increase from 61 in the previous quarter [4] - Despite its potential, the company is not among the 30 most popular stocks among hedge funds, with some analysts suggesting that certain AI stocks may offer better upside potential [4]

Core Insights - Coherent Corp. has launched a next-generation polarization-maintaining optical fiber aimed at enhancing performance and reliability in the high-performance fiber laser market [1][10] Product Features - The new optical fiber, designated as PLMA-EYDF-25P/300-XPH-11FA, is engineered to improve the performance, reliability, and power scalability of narrow-linewidth and single frequency 1550 nm amplifiers, particularly for long-range LIDAR applications in sectors like wind energy and advanced air traffic sensing [2] - This innovative product boasts a larger mode effective area and enhanced polarization maintaining performance, which reduces non-linear effects and allows for greater power scalability, delivering superior pointing stability and low 1 µm ASE noise [3] - When combined with its matched passive fiber (PLMA-GDF-25/300), the new fiber maximizes beam quality and polarization extinction ratio, representing a significant advancement in fiber laser technology [3] Applications - The PLMA fiber is suitable for a variety of applications, including high-precision materials processing, advanced long-range LIDAR systems, quantum technology, medical laser systems, and scientific research [4] Company Commitment - Coherent is dedicated to providing high-quality optical fiber solutions, with the new PLMA fiber exemplifying the company's commitment to innovation and excellence [5]