Coherent delivered a strong fiscal Q3 with record revenue, accelerating growth, and expanding margins, driven by exceptional AI data center demand. The company is aggressively expanding indium phosphide capacity ahead of plan and highlighted multiple new growth vectors including OCS, CPO, and multirail, all expanding their addressable market. Revenue of $1.8B, up 9% sequentially and 27% YoY on pro forma basis; guidance for Q4 implies acceleration to ~$1.98B midpoint.
Coherent delivered a strong fiscal Q3 with record revenue, accelerating growth, and expanding margins, driven by exceptional AI data center demand. The company is aggressively expanding indium phosphide capacity ahead of plan and highlighted multiple new growth vectors including OCS, CPO, and multirail, all expanding their addressable market. Revenue of $1.8B, up 9% sequentially and 27% YoY on pro forma basis; guidance for Q4 implies acceleration to ~$1.98B midpoint.
Management consistently describes demand as 'exceptionally strong' with 'no signs of attenuation,' and reiterates accelerating growth and expanding capacity.
Capex was $290M in Q3, up sharply from prior quarters, and is expected to increase again in Q4, reflecting investments in internal indium phosphide capacity (6-inch), OCS production, and other growth areas. The company is doubling indium phosphide capacity by end of 2026 and…
Management says AI-driven demand for optical networking, transceivers (800G/1.6T), OCS, and CPO remains exceptionally strong, with orders extending into calendar 2028, and CPO revenue ramps starting 2H 2026 (scale-out) and 2H 2027 (scale-up). They are expanding capacity to meet…
Demand visibility extends to 2028; orders at record levels. Management consistently describes demand as 'exceptionally strong' with 'no signs of attenuation,' and reiterates accelerating growth and expanding capacity.
Management says AI-driven demand for optical networking, transceivers (800G/1.6T), OCS, and CPO remains exceptionally strong, with orders extending into calendar 2028, and CPO revenue ramps starting 2H 2026 (scale-out) and 2H 2027 (scale-up). They are expanding capacity to meet demand, and see AI as a multi-year growth driver.
Demand visibility extends to 2028; orders at record levels. Management consistently describes demand as 'exceptionally strong' with 'no signs of attenuation,' and reiterates accelerating growth and expanding capacity.
Capex was $290M in Q3, up sharply from prior quarters, and is expected to increase again in Q4, reflecting investments in internal indium phosphide capacity (6-inch), OCS production, and other growth areas. The company is doubling indium phosphide capacity by end of 2026 and plans to more than double again by 2027.
Management consistently describes demand as 'exceptionally strong' with 'no signs of attenuation,' and reiterates accelerating growth and expanding capacity.
OCS is a fast-growing high-value layer of AI networking; removing this bottleneck lets Coherent convert its record backlog and positions it to take share from incumbent OCS vendors.
“We recently resolved a bottleneck in our production capacity and are now ramping output rapidly across two production facilities.”
“As I mentioned in their prepared remarks, We did kind of have a breakthrough over the last couple months on removing a bottleneck in the production capacity that's allowed us to ramp production at a much faster rate, and we're ramping in tw”
“We remain on track to achieve our goal of doubling internal indium phosphide output capacity by the end of this calendar year, and based on current execution, we now expect to reach that milestone one quarter earlier than originally planne…”
“We have signed or are in the process of finalizing long-term supply agreements with multiple strategic customers that include both multi-year demand commitments and upfront investment to support capacity expansion.”
| 지표 | 기간 | 범위 | 중간값 | 상태 |
|---|---|---|---|---|
| EPS | FY2026 Q4 | $1.52–$1.72 | $1.62 | GUIDED |
| Gross margin | FY2026 Q4 | 39%–41% | 40% | GUIDED |
| Revenue | FY2026 Q4 | $1.91B–$2.05B | $1.98B | GUIDED |
| 제시 시점 | 지표 | 목표 기간 | 가이던스 | 실제 | 결과 |
|---|---|---|---|---|---|
| FY2026 Q2 | EPS | FY2026 Q3 | $1.28–$1.48 | $1.41 | Met / beat |
| FY2026 Q2 | Gross margin | FY2026 Q3 | 38.5%–40.5% | 37.66% | Missed |
| FY2026 Q2 | Revenue | FY2026 Q3 | $1.7B–$1.84B | $1.8056B | Met / beat |
6-inch indium phosphide capacity ramp is ahead of schedule; the goal of doubling internal capacity will be reached one quarter earlier than planned, and capacity will more than double again by end of calendar 2027. — Resolution of the industry-wide InP constraint is a critical gating factor for 1.6T transceiver and CPO volumes, and Coherent's early ramp enables share gains at the expense of competitors reliant on external InP supply.
“This partnership includes both NVIDIA's $2 billion equity investment in Coherent and a multi-year supply agreement extending through the end of the decade.”
… As we have discussed previously, CPO expands our role in AI data center architectures, particularly in the scale-up portion of the network, where optics is expected to increasingly complement and over time displace copper. We believe CPO represents more than $15 billion of incremental addressable market opportunity. In March, we announced a strategic partnership with NVIDIA focused on multiple CPO-related products and solutions. This partnership includes both NVIDIA's $2 billion equity investment in Coherent and a multi-year supply agreement extending through the end of the decade. The agreement covers multiple CPO-related products, including our high-power CW laser, and provides meaningful long-term visibility into future demand. More broadly, our CPO opportunity is supported by the breadth and depth of Coherence's photonic technology platform. We believe our breadth of photonic technology and our manufacturing scale position us very well to support a broad range of customer requirements across key optical components, subsystems, and higher-level assemblies. We expect initial scale-out CPO revenue to begin ramping in the second half of this calendar year, with scale-up CPO …
6-inch indium phosphide capacity ramp is ahead of schedule; the goal of doubling internal capacity will be reached one quarter earlier than planned, and capacity will more than double again by end of calendar 2027. — Resolution of the industry-wide InP constraint is a critical gating factor for 1.6T transceiver and CPO volumes, and Coherent's early ramp enables share gains at the expense of competitors reliant on external InP supply.
“We remain on track to achieve our goal of doubling internal indium phosphide output capacity by the end of this calendar year, and based on current execution, we now expect to reach that milestone one quarter earlier than originally”
… capacity expansion remains one of our highest priorities. Importantly, we continue to make excellent progress on our six-inch indium phosphide ramp, which is a key driver of our long-term capacity expansion and a meaningful differentiator for coherent. We are now seeing the benefits of this ramp in both revenue and margin, and we expect those benefits to increase further over the coming quarters. We remain on track to achieve our goal of doubling internal indium phosphide output capacity by the end of this calendar year, and based on current execution, we now expect to reach that milestone one quarter earlier than originally planned. We also expect to more than double our internal indi-phosphide capacity again by the end of calendar 2027. Our six-inch platform is producing EMLs, CW lasers, and photodiodes, and the yields for each of the three device categories continues to exceed those of our three-inch production lines. During the quarter, we shipped our first transceivers containing components produced on our six-inch lines, and those shipments contributed to both sequential revenue growth and gross margin improvement. The initial six inch production contribution came from …
Coherent resolved a production bottleneck in OCS systems, enabling rapid output ramp across two facilities. — OCS is a fast-growing high-value layer of AI networking; removing this bottleneck lets Coherent convert its record backlog and positions it to take share from incumbent OCS vendors.
… product lines over the coming quarters. We expect OCS revenue to grow this quarter as we ramp production capacity to meet demand. We have increased our view of the OCS market opportunity to over $4 billion, reflecting expanding use cases across data center interconnect, scale out and scale up networks, and continued broadening customer engagement. We believe OCS also expands our role into higher value layers of AI networking infrastructure. We recently resolved a bottleneck in our production capacity and are now ramping output rapidly across two production facilities. As a result, we expect strong sequential revenue growth over the coming quarters as production improvements translate into higher shipments and backlog conversion. We also continue to make strong progress in co-packaged optics, which we believe represents one of the most important long-term growth opportunities for Coherent. As we have discussed previously, CPO expands our role in AI data center architectures, particularly in the scale-up portion of the network, where optics is expected to increasingly complement and over time displace copper. We believe CPO represents more than $15 billion of incremental …