erent (US:COHR)2026-02-04 21:06Revenue Performance - Revenues for the three months ended December 31, 2025 increased 17% to $1,686 million, compared to $1,435 million for the same period last fiscal year [132]. - Revenues in the Datacenter & Communications segment increased by $303 million (34%) driven by strong AI datacenter demand and increased demand in traditional telecom applications [132]. - Revenues for the six months ended December 31, 2025 increased 17% to $3,267 million, compared to $2,783 million for the same period last fiscal year [134]. - Datacenter & Communications segment revenues increased 30% to $2,298 million for the six months ended December 31, 2025, driven by strong AI datacenter demand and increased telecom applications [147]. - Industrial segment revenues decreased 4% to $969 million for the six months ended December 31, 2025, primarily due to the divestiture of the aerospace and defense business [149]. Profitability and Margins - Gross margin for the three months ended December 31, 2025 was 37%, up from 36% in the same period last year [131]. - Gross margin for the six months ended December 31, 2025 was $1,202 million, or 37% of revenues, an increase of 200 basis points compared to the same period last fiscal year [135]. - Net earnings attributable to Coherent Corp. for the three months ended December 31, 2025 were $147 million, compared to $103 million for the same period last year, representing a 43% increase [131]. - Segment profit for the Datacenter & Communications segment increased 33% to $576 million for the six months ended December 31, 2025, driven by higher revenues [148]. Expenses and Charges - The company recorded restructuring charges of $4 million in the three months ended December 31, 2025, down from $8 million in the same period last year [131]. - Research and development expenses for the six months ended December 31, 2025 were $321 million, or 10% of revenues, reflecting continued investment in product portfolios [136]. - Selling, general and administrative expenses for the six months ended December 31, 2025 were $511 million, or 16% of revenues, primarily due to higher legal and consulting costs [137]. - The company expects restructuring actions to be substantially completed by the end of fiscal 2026, with total charges of $107 million anticipated for fiscal 2025 [120]. - 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 [122]. Cash Flow and Financing - Net cash provided by operating activities was $104 million for the six months ended December 31, 2025, a decrease from $340 million in the prior fiscal year [153]. - Net cash provided by investing activities was $158 million for the six months ended December 31, 2025, compared to net cash used of $172 million for the same period in the prior fiscal year [154]. - Net cash used in financing activities was $378 million for the six months ended December 31, 2025, compared to $266 million for the same period in the prior fiscal year [155]. - The Company incurred interest expense of $33 million and $79 million for the three and six months ended December 31, 2025, respectively [157]. - As of December 31, 2025, the Company had $60 million in borrowings outstanding under the Revolving Credit Facility and total debt obligations of $3.352 billion [158]. Investments and Future Outlook - The Company completed two investment agreements on December 4, 2023, receiving $1.0 billion cash for 25% equity in Silicon Carbide LLC, aimed at funding future capital expansion [159]. - The Company believes existing cash, cash flow from operations, and available borrowing capacity will be sufficient to fund its needs for at least the next twelve months [160]. - As of December 31, 2025, the Company held approximately $770 million of cash, cash equivalents, and restricted cash outside the United States [161]. - The Company had $665 million of restricted cash, including $661 million at Silicon Carbide LLC restricted for use by that subsidiary [162]. Interest Rate and Risk Management - A change in interest rates of 100 basis points on variable rate borrowings would have resulted in additional interest expense of $6 million and $13 million for the three and six months ended December 31, 2025, respectively [164]. - The Company paused its balance sheet hedging program indefinitely as of September 30, 2024, while continuing to analyze foreign exchange risks [163].