Coherent Corp. (NYSE:COHR) Posts Mixed Q4 Earnings Amid Strategic Divestiture and AI Focus

Coherent Corp. (NYSE:COHR) Reports Mixed Q4 Results Amid Strategic Shifts

Coherent Corp. (NYSE:COHR) announced its fiscal fourth-quarter and full-year 2025 results, delivering revenue growth but falling short of analyst expectations on earnings per share (EPS). The company’s performance reflects both operational progress and ongoing challenges, with the market reacting sharply to the earnings miss.

Key Financial Highlights

• Q4 Revenue: $1.53 billion, up 16.4% year-over-year (YoY) but slightly below the consensus estimate of $1.54 billion.
• Q4 Non-GAAP EPS: $1.00, missing analyst expectations of $0.93.
• Full-Year Revenue: $5.81 billion, a 23% YoY increase, with non-GAAP gross margin expanding 358 basis points to 37.9%.
• Full-Year Non-GAAP EPS: $3.53, up 191% YoY, reflecting improved profitability.

Despite the revenue growth, the EPS miss appears to have driven a sharp after-hours decline of -17.55%, signaling investor disappointment. The stock had been relatively stable in recent weeks, with modest gains of 0.06% over the past week and 16.55% over the past month, but the earnings reaction suggests concerns over profitability and execution.

Market Reaction and Outlook

The company provided guidance for Q1 fiscal 2026, expecting revenue between $1.46 billion and $1.60 billion, bracketing the analyst consensus of $1.565 billion. Non-GAAP EPS is projected at $0.93 to $1.13, compared to the Street’s estimate of $1.03. The midpoint of this range suggests cautious optimism, though the broader market reaction indicates skepticism.

Strategic Moves and Business Highlights

• Divestiture of Aerospace & Defense: Coherent announced the sale of its Aerospace and Defense business to Advent International for $400 million, a move aimed at streamlining operations and focusing on high-growth segments like AI datacenters.
• Product Milestones: The company reported initial revenue from its 1.6T datacom transceivers and optical circuit switch (OCS) platform, positioning itself in the expanding AI infrastructure market.
• Margin Expansion: Non-GAAP gross margins improved significantly, driven by cost efficiencies and product mix shifts.

Conclusion

While Coherent demonstrated strong top-line growth and margin expansion, the EPS miss and mixed guidance have weighed on investor sentiment. The strategic divestiture and focus on AI-related technologies could provide long-term upside, but near-term execution risks remain a concern.

For more detailed earnings estimates and historical performance, visit Coherent Corp.’s earnings page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research before making any financial decisions.