erent (US:COHR)2025-11-05 21:16Financial 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].