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Dec 31, 2025
Coherent Q2 2026 Earnings Report
Coherent Corp. reported strong year-over-year revenue growth in Q2 fiscal 2026, driven by demand in datacenter and communications, with significant increases in GAAP and non-GAAP EPS.
Key Takeaways
Coherent Corp. announced strong financial results for its second quarter of fiscal year 2026, with revenues reaching $1.69 billion, a 17% increase year-over-year. The company reported GAAP diluted EPS of $0.76, up 71% year-over-year, and non-GAAP diluted EPS of $1.29, up 35% year-over-year. This growth was primarily fueled by robust demand in the datacenter and communications segment.
Q2 revenue reached $1.69 billion, marking a 17% year-over-year increase, and 22% year-over-year on a pro forma basis adjusted for the sale of the aerospace & defense business.
GAAP gross margin improved to 36.9%, an increase of 145 basis points year-over-year, while non-GAAP gross margin rose to 39.0%, up 77 basis points year-over-year.
GAAP diluted EPS increased by 71% year-over-year to $0.76, and non-GAAP diluted EPS grew by 35% year-over-year to $1.29.
Strong demand in the datacenter and communications segment was a key driver for the robust year-over-year revenue growth.
Revenue by Segment
Forward Guidance
For the third quarter of fiscal 2026, Coherent Corp. expects revenue between $1.70 billion and $1.84 billion, with non-GAAP gross margin between 38.5% and 40.5%, and non-GAAP EPS between $1.28 and $1.48.
Positive Outlook
- Expected continued strong growth in the second-half of fiscal 2026 and throughout fiscal 2027.
- Strong datacenter and communications demand is anticipated to continue.
- Continued production capacity expansion is underway to meet demand.
- Improving demand in the Industrial segment is expected.
- Significant revenue growth and gross margin expansion are driving capital investment to increase capacity.
Challenges Ahead
- The Q3 outlook includes only $5 million of revenue from the Munich tools business due to its sale at the end of January 2026.
- The company cannot provide a quantitative reconciliation of forward-looking non-GAAP measures due to the variability of certain items.
- Restructuring charges, integration, site consolidation, foreign exchange gains/losses, and share-based compensation expense are difficult to forecast.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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