Core Viewpoint - Coherent's stock plummeted nearly 20% in pre-market trading due to disappointing revenue guidance for the next quarter, despite achieving record revenue in the fourth quarter driven by AI data center investments [1][2]. Financial Performance - For the fiscal year 2025, Coherent reported revenue of $5.81 billion, a 23% increase year-over-year, with a GAAP gross margin of 35.2%, up 424 basis points from the previous year [2]. - The fourth quarter revenue reached a record $1.53 billion, reflecting a 16% year-over-year growth and a 2% quarter-over-quarter increase [2][4]. - Non-GAAP diluted earnings per share for the fourth quarter were $1.00, compared to $0.91 in the previous quarter and $0.51 in the same quarter last year [4]. Market Outlook - The company anticipates next quarter's revenue to be between $1.46 billion and $1.6 billion, which is below market expectations, raising concerns among investors [4][5]. - Coherent's network business is benefiting from a surge in AI data center investments, with data center revenue growing over 60% year-over-year [7]. - The demand for 800G transceivers is expected to continue increasing, with initial shipments of 1.6T transceivers also contributing to revenue growth [7]. Industry Trends - Approximately 80% of market demand for optical modules is driven by AI data centers, primarily supporting high-performance networks [8]. - The global Ethernet optical module market is projected to reach $10 billion in 2024, nearly doubling year-over-year, with a sustained growth rate of around 50% in 2025 [8]. - The evolution of AI data center architectures is expected to drive long-term demand for high-end optical modules, providing growth momentum for the industry [8].

Core Viewpoint - Coherent's stock plummeted nearly 20% in pre-market trading due to disappointing revenue guidance for the upcoming quarter, despite strong performance in the previous fiscal year driven by AI data center investments [2][3][4]. Financial Performance - For the fourth quarter of fiscal year 2025, Coherent reported a record revenue of $1.53 billion, a 16% year-over-year increase [2][6]. - The total revenue for fiscal year 2025 reached $5.81 billion, up 23% from the previous year, with a GAAP gross margin of 35.2%, an increase of 424 basis points [5][6]. - Non-GAAP diluted earnings per share for the fourth quarter were $1.00, compared to $0.91 in the previous quarter and $0.51 in the same quarter last year [8]. Future Guidance - Coherent expects revenue for the next quarter to be between $1.46 billion and $1.6 billion, which is below market expectations, raising concerns among investors [2][8]. - The company anticipates a non-GAAP gross margin between 37.5% and 39.5% for the upcoming quarter [9]. Market Dynamics - The demand for AI data centers significantly boosted Coherent's network business, with a growth rate exceeding 60% for the year [11]. - The market for Ethernet optical modules is projected to reach $10 billion in 2024, with a nearly 100% year-over-year increase, driven primarily by AI data center demand [12]. Industry Outlook - The evolution of AI data center architectures is expected to sustain high-end optical module demand, providing long-term growth momentum for the industry [12].