Coherent Corp Q4 2026 Earnings: AI Data Center Demand Drives a Beat
Coherent beat profit and sales estimates as AI data-center optics demand surged, and guided next quarter's results even higher.
| Q4 2026 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $1.74 | $1.65 | +5.6% |
| Revenue | $2.05B | $2.03B | +1.0% |
Key takeaways
- Coherent’s adjusted profit and revenue both beat Wall Street’s targets for the quarter, capping a fiscal year in which total revenue grew 22.5% and the company swung from a loss a year earlier to solid profitability.
- Most of the strength came from the Datacenter and Communications business, which made up about 79% of total sales and grew 59% year-over-year, as customers kept building out AI computing infrastructure that relies on Coherent’s optical components.
- Profitability kept improving: quarterly non-GAAP gross margin reached 40.2%, and over the trailing twelve months operating and net margins both expanded as higher-margin AI-related products became a bigger share of sales.
- For the current quarter (fiscal Q1 2027), Coherent guided revenue to $2.2-$2.4 billion and adjusted EPS to $1.85-$2.05 - both above what it just reported - signaling management expects AI-driven demand to keep accelerating rather than plateau.
- CEO Jim Anderson called fiscal 2026 “an outstanding year,” pointing to record revenue, “significant margin expansion,” and profit growth that outpaced revenue growth by more than two-to-one.
- Coherent cited its multiyear strategic partnership with Nvidia - which includes a multibillion-dollar purchase commitment from Nvidia plus a separate $2 billion equity investment - as evidence of deepening ties with the AI computing buildout.
- Management also flagged co-packaged optics, a next-generation networking technology, as an emerging growth driver: initial shipments are expected in the second half of calendar 2026, with a larger wave of related products following in 2027.
Q4 2026 in context
| Metric | Jun 2026 | Jun 2025 | Change |
|---|---|---|---|
| Revenue | $2.0B | $1.5B | +33.7% |
| Net income | $241M | -$96M | +351.6% |
| Free cash flow | -$486M | -$1M | -45512.1% |
| Gross margin | 38.5% | 35.7% | +2.8 pts |
| Net margin | 11.8% | -6.3% | +18.0 pts |
Figures for the quarter ended Jun 2026 and the quarter ended Jun 2025, as reported to the SEC. Fourth-quarter flows are derived as the fiscal year minus its first three quarters.
How the stock took it
Coherent Corp closed at $328.57 on Aug 11, 2026, the last session before the report, and at $327.23 on Aug 13, 2026, the first session after it — -0.4% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 36.8% | Trailing 12 months |
| Operating margin | 11.0% | Trailing 12 months |
| Net profit margin | 7.1% | Trailing 12 months |
| Pretax margin | 7.7% | Trailing 12 months |
| EPS | $2.25 | Trailing 12 months |
| Revenue growth (YoY) | 18.0% | Trailing 12 months |
| EPS growth (YoY) | 275.5% | Trailing 12 months |
| Return on equity | 5.3% | Trailing 12 months |
Sources: company report · 24/7 Wall St · Simply Wall St News · earnings call