Core Viewpoint - The article highlights the significant drop in Coherent's stock price following disappointing earnings guidance, despite strong demand in AI data centers and record revenue in the latest fiscal quarter [2][4][7]. Financial Performance - Coherent reported a record revenue of $1.53 billion for the fourth fiscal quarter of 2025, a 16% year-over-year increase, slightly above analyst expectations of $1.51 billion [7]. - The adjusted earnings per share were $1.00, exceeding Wall Street's forecast of $0.92 [7]. - Free cash flow was reported at -$1 million, down from $62.41 million in the same period last year [7]. Future Guidance - Coherent's revenue guidance for the next quarter is projected to be between $1.46 billion and $1.6 billion, with a midpoint of $1.53 billion, which is below the market expectation of $1.55 billion [8]. - The company anticipates adjusted earnings per share in the range of $0.93 to $1.13, with a midpoint of $1.03, aligning with market expectations [8]. Business Segments - The AI data center segment showed robust performance, with revenue reaching $945 million, a 39% year-over-year increase, driven by strong demand for high-bandwidth optical network equipment [11]. - Other segments, including materials and lasers, experienced an 8% decline, offsetting the gains from the network business [12]. Strategic Moves - Coherent announced the sale of its defense laser business for $400 million, which will be used to pay down part of its $3.7 billion debt, raising concerns about its financial health [9][10]. - The CEO emphasized the focus on AI data centers as a key growth driver and the need to optimize the product portfolio by divesting non-core businesses [10]. Market Trends - The demand for optical networks is expected to grow, particularly with the rise of AI data centers, as Coherent aims to capitalize on this trend [14]. - Coherent has established a new multi-year supply partnership with Apple to provide next-generation VCSELs for iPhones and iPads, which will start contributing to revenue in 2026 [12].