Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

COHR · Q2 2026 Earnings

Coherent Corp.

Reported February 4, 2026

30-second summary

30-second take: Q2 revenue of $1.69B grew 17.5% YoY and 6.6% QoQ, landing at the high end of the $1.56B–$1.70B guide, with Datacenter & Communications up 33.6% YoY to $1.208B. Non-GAAP EPS of $1.29 beat the high end of the $1.10–$1.30 range, non-GAAP gross margin hit 39.0% (midpoint of guide), and Q3 is guided to $1.70B–$1.84B revenue with EPS of $1.28–$1.48 — a sequential acceleration, not a digest. The new headline is management's explicit commitment that "fiscal 27 revenue growth rate [will] exceed our fiscal 26 growth rate," paired with a forecast of multi-year indium phosphide supply-demand imbalance and an "exceptionally large" CPO design win generating initial revenue this calendar year.

Headline numbers

EPS

Q2 FY2026

$1.29

Revenue

Q2 FY2026

$1.69B

+17.5% YoY

Gross margin

Q2 FY2026

36.9%

Operating margin

Q2 FY2026

10.9%

Key financials

Q2 FY2026

Metric	Q2 FY2026	YoY	Q1 FY2026	QoQ
Revenue	$1.69B	+17.5%	$1.58B	+6.9%
EPS	$1.29	—	$1.16	+11.2%
Gross margin	36.9%	—	36.6%	+30bps
Operating margin	10.9%	—	16.4%	-550bps

Guidance

Strong Q2 beat on revenue and EPS; Q3 guidance raised with midpoint revenue 4% higher than Q2 actual and EPS midpoint 7% higher, driven by continued datacenter strength.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	$1.56B to $1.70B	$1.69B	at the high end of guide	Beat
Non-GAAP EPS	Q2 FY2026	$1.10 to $1.30	$1.29	+$0.19 above midpoint	Beat
Non-GAAP Gross Margin	Q2 FY2026	38% to 40%	39.0%	at midpoint of guide	Beat
Non-GAAP Operating Expenses	Q2 FY2026	$300M to $320M	~$320M	in-line (implied high end)	Met

New guidance

Metric	Period	Guide	YoY
Revenue	Q3 FY2026	$1.70B to $1.84B	—
Non-GAAP EPS	Q3 FY2026	$1.28 to $1.48	—
Non-GAAP Gross Margin	Q3 FY2026	38.5% to 40.5%	—
Non-GAAP Operating Expenses	Q3 FY2026	$320M to $340M	—
Non-GAAP Tax Rate	Q3 FY2026	18% to 20%	—

Segment performance

Q2 FY2026

Segment	Q2 FY2026	YoY
Datacenter & Communications	$1.208B	+33.6%
Industrial	$0.478B	-9.9%
Datacenter & Communications Segment Revenue Growth YoY	33.6%	—
Industrial Segment Revenue Growth YoY	-9.9%	—

Profitability

Q2 FY2026

Segment	Q2 FY2026
Non-GAAP Operating Margin	19.9%
Non-GAAP Gross Margin	39.0%

Management tone

Q3 FY25 supply-constrained → Q4 FY25 capacity story queued up → Q1 FY26 capacity executing → Q2 FY26 multi-year visibility locked in

Visibility has shifted from "record bookings extending a year out" to forecasts running through calendar 2028. Last quarter management framed visibility as "more than a year" of bookings; this quarter management said "most of our calendar 26 is booked out, and calendar 27 is filling very, very quickly" with customer forecasts "out two, three years…into calendar 28." The anchor quote: "The visibility of the business is the best it's ever been, which gives us just kind of great confidence in terms of the go-forward growth that we're seeing." This is the basis on which management is now willing to call FY27 growth above FY26 — a forward statement Coherent has historically refused to make.

Indium phosphide narrative escalated from "doubling capacity" to "multi-year structural supply-demand imbalance." Q4 introduced the 6-inch line; Q1 committed to doubling internal capacity; this quarter management said "I don't foresee the supply demand getting back in balance this calendar year. I don't think it happens next calendar year…we could be in a very sustained long period of supply demand imbalance." By end of calendar 2026 about half of internal capacity will be 6-inch, with each 6-inch wafer producing >4x the chips at <50% the cost of a 3-inch. The shift signals that the supplier-of-last-resort dynamic — Coherent supplementing internal capacity with external sourcing — is now a multi-year competitive moat rather than a temporary bottleneck.

CPO moved from "initial deployments in calendar 2026" to a named, sized design win generating revenue this year. Last quarter CPO was guided as "initial deployments in calendar 2026." This quarter: "We recently secured an exceptionally large purchase order from a market-leading AI data center customer for a CPO solution…We expect this significant design win to generate initial revenue toward the end of this calendar year with a more significant revenue contribution next calendar year." Pressed on the scale-up timing, management said "I wouldn't call it years out. I think it's sooner than that based on the plans that we're seeing from our customers." CPO has compressed from a 2027+ optionality story to an FY26-revenue contributor.

OCS TAM was revised upward intra-quarter — an unusual move. Last quarter OCS was shipped to seven customers against a >$2B TAM. This quarter management said engagement has grown to "over 10 customer engagements," applications have expanded from scale-out into DCI, and "we likely undersized it…if we reassess it now, it would be well above $2 billion." Revising your own TAM upward one quarter after publishing it is the strongest signal management can send short of disclosing the revenue number.

Industrial reframed from "stable contributor" to a queued June-quarter inflection. Despite the -9.9% YoY print, management explicitly called out "a significant increase in orders in Q2 from our semi-cap customers" with sequential growth expected in the June quarter and through the remainder of calendar 2026. The pattern — order-book signal preceding revenue inflection by one to two quarters — mirrors how Q4 FY25's "silicon carbide stabilized" call preceded Q1 FY26's +1.4% YoY print.

Recurring themes management leaned on this quarter:

AI data center demand acceleration driving sustained revenue growth6-inch indium phosphide capacity ramp as margin lever and competitive moat1.6T transceiver ramp accelerating faster than expected across multiple customersCPO and OCS as significant incremental TAM and near-term growth driversLong-term supply agreements and customer forecasts providing unprecedented visibilityOperating leverage through gross margin expansion targeting >42% long-term

Risks management surfaced:

Supply-demand imbalance could persist through multiple calendar years if customer forecasts materializeCompetitive capacity expansions from competitors could pressure market shareRisk of execution delays in parallel 6-inch manufacturing ramps across multiple sitesCustomer mix and product mix volatility could create quarterly gross margin headwindsExternal supplier pricing pressures for components like EMLs

Answers to last quarter's watch list

Whether Q2 datacom delivers the ~10% sequential growth. Comfortably exceeded. Datacenter & Communications grew 33.6% YoY to $1.208B versus $1.090B in Q1 (+10.8% QoQ), and management is now guiding "double-digit sequential growth in data center" again in both Q3 and Q4. The supply story is converting to revenue on schedule.

Resolved positively

Non-GAAP gross margin landing in the upper half of the 38%–40% Q2 guide. Landed at 39.0% — the midpoint, not the upper half. Not a miss, but not the re-rating signal. Q3 guide of 38.5%–40.5% raises both ends, suggesting the 6-inch margin benefit is real but back-half-weighted.

Continue monitoring

Discrete 1.6T revenue disclosure or customer count. Not disclosed as a discrete number. Management framed 1.6T as ramping "faster than expected across multiple customers" but stopped short of a revenue or customer count. Given the magnitude of the datacom beat, the absence is conspicuous.

Continue monitoring

Capex trajectory vs. operating cash flow. Capex and OCF figures were not disclosed in the press release. The qualitative posture — "100% focused on ramping capacity and production as fast as possible" — implies sustained elevated capex, but the print this quarter doesn't give the number.

Not resolved

CPO deployment timing and customer count. A specific "exceptionally large" purchase order from a market-leading AI data center customer was disclosed, with initial revenue toward end of calendar 2026 and "significant" contribution next calendar year. Customer not named, but design-win framing and revenue timing are now concrete.

Resolved positively

Industrial YoY trajectory. Reversed from Q1's +1.4% to -9.9% YoY this quarter, breaking the tentative inflection. Management is pointing to a June-quarter recovery on semi-cap orders received in Q2, but the second consecutive positive print did not happen.

Resolved negatively

What to watch into next quarter

Whether Q3 revenue lands in the upper half of $1.70B–$1.84B. Management's "continued strong sequential revenue growth" and "double-digit sequential growth in data center" framing argues for the upper half; landing at $1.77B or below would suggest the supply ramp is hitting near-term throughput limits even as orders accelerate.

Non-GAAP gross margin reaching the upper half of 38.5%–40.5%. Three consecutive quarters of mid-band margins would call into question how much of the 6-inch cost advantage actually flows through versus being consumed by mix and capacity-ramp costs. The 42% long-term target requires the high end of the band.

First discrete 1.6T revenue figure or customer count. Two consecutive quarters of management positioning 1.6T as a major growth driver without a discrete number is starting to look like a deliberate choice rather than a timing issue. The Q3 print is the credible window before silence becomes a question.

Industrial sequential growth ahead of June quarter. Management has now guided industrial to inflect in Q4 (June quarter) — Q3 needs to show at least flat-to-up sequential industrial revenue to validate the semi-cap order signal. Continued sequential decline would push the inflection out another quarter.

Named CPO customer or first revenue framing. Management said initial CPO revenue is coming "toward the end of this calendar year." Q3 is the natural quarter to disclose either the customer name or a revenue dollar contribution to make the design-win narrative falsifiable.

Any FY26 revenue or EPS guide. Coherent has now declined to guide FY26 across three consecutive quarters (Q4 FY25 print, Q1 FY26, Q2 FY26) despite committing to FY27 growth exceeding FY26. The asymmetry is unusual; whether management eventually frames an FY26 range or holds the quarter-by-quarter cadence is a structural signal about how confident they truly are.

Sources

Coherent Corp. Q2 FY2026 press release / 8-K Exhibit 99.1 — SEC EDGAR: https://www.sec.gov/Archives/edgar/data/820318/000119312526037556/d101115dex991.htm

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