erent (US:COHR)2025-05-07 20:10Financial Performance - Total revenues for the three months ended March 31, 2025, increased 24% to $1,498 million compared to $1,209 million for the same period last fiscal year [128]. - Total revenues for the nine months ended March 31, 2025, were $4,281 million, a 26% increase from $3,393 million for the same period last year [127]. - Revenues in the communications market increased by $281 million (46%), driven by strong AI datacenter related revenue growth [128]. - Networking revenues increased 45% year-over-year due to strong AI datacenter demand and growth in telecom [129]. - Networking revenues increased 53% year-over-year to $2,476 million for the nine months ended March 31, 2025, driven by strong AI datacenter demand [142]. Profitability - Gross margin for the three months ended March 31, 2025, improved to 35% from 30% in the same period last year [127]. - Gross margin for the nine months ended March 31, 2025 was $1,497 million, or 35% of total revenues, an increase of 484 basis points compared to the same period last fiscal year [131]. - Net earnings attributable to Coherent Corp. for the three months ended March 31, 2025, were $16 million, compared to a net loss of $13 million in the same period last year [127]. - Segment profit for the Lasers segment increased 123% to $93 million for the three months ended March 31, 2025, compared to $42 million for the same period last fiscal year [148]. - Segment profit for the Materials segment increased 41% to $249 million for the nine months ended March 31, 2025, compared to $177 million for the same period last fiscal year [146]. Expenses - Research and development expenses for the nine months ended March 31, 2025 were $426 million, or 10% of revenues, compared to $352 million, or 10% of revenues, for the same period last fiscal year [132]. - Selling, general and administrative expenses for the nine months ended March 31, 2025 were $681 million, or 16% of revenues, compared to $626 million, or 18% of revenues, for the same period last fiscal year [133]. - Restructuring charges for the three months ended March 31, 2025, amounted to $74 million, compared to $12 million in the same period last year [127]. - Restructuring charges for the nine months ended March 31, 2025 were $106 million, consisting of asset write-offs and employee termination costs [134]. Cash Flow and Debt - Net cash provided by operating activities increased to $503 million for the nine months ended March 31, 2025, up from $383 million in the same period last year, primarily due to higher earnings [151]. - Net cash used in investing activities was $284 million for the nine months ended March 31, 2025, compared to $249 million in the prior year, with capital expenditures increasing by $63 million year-over-year [152]. - Net cash used in financing activities was $386 million for the nine months ended March 31, 2025, a significant decrease from net cash provided of $820 million in the same period last year, mainly due to payments on existing debt [153]. - As of March 31, 2025, the company had total debt obligations of $3,732 million, down from $4,100 million as of June 30, 2024 [155]. - The company believes existing cash, cash flow from operations, and available borrowing capacity will be sufficient to meet its needs for at least the next twelve months [157]. Strategic Actions - The company achieved its previously announced $250 million synergy plan, including savings from supply chain management and operational efficiencies [118]. - The company expects restructuring actions to be substantially completed by the end of fiscal 2026 [117]. - The company does not expect tariffs and trade sanctions to have a material impact on its business in the fourth quarter of fiscal 2025 [121]. Interest and Tax - Interest and other net expense for the nine months ended March 31, 2025 was $126 million, a decrease of $64 million compared to the same period last fiscal year [136]. - The effective income tax rate for the year-to-date at March 31, 2025 was 19%, down from 29% for the same period in 2024 [137]. - The company has an interest rate cap effective from July 1, 2023, which reduced interest expense by $27 million for the nine months ended March 31, 2025 [154]. - A change in interest rates of 100 basis points on variable rate borrowings would have resulted in additional interest expense of $23 million for the nine months ended March 31, 2025 [161]. Cash and Investments - As of March 31, 2025, the company held approximately $890 million in cash and cash equivalents, with $838 million held outside the United States [158]. - The company received $1.0 billion in exchange for 25% equity in Silicon Carbide LLC, aimed at funding future capital expansion in the silicon carbide business [156]. Risk Management - The company paused its balance sheet hedging program indefinitely as of September 30, 2024, while continuing to analyze foreign exchange risks [160].