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]