Coherent Corp. Reports 27% Revenue Growth and Net Income Turnaround in Latest Quarter

Coherent Corp. reported significant financial improvements in its latest quarterly results, with revenues for the three months ending December 31, 2024, reaching $1.435 billion, a 27% increase from $1.131 billion in the same period last year. The company also achieved a net income of $103.4 million, compared to a net loss of $27 million in the prior year. For the six-month period, revenues rose to $2.783 billion, up from $2.185 billion, while net earnings were $129.3 million, reversing a loss of $94.5 million from the previous year. The improved performance was attributed to strong demand in the communications market, particularly driven by AI datacenter needs and a recovery in telecom.

The company experienced notable changes in its operational metrics, with a gross margin of 36% for the latest quarter, up from 31% a year earlier. This increase was primarily due to higher sales volumes and cost reductions. Research and development expenses remained stable at 10% of revenues, reflecting ongoing investments in product development. Selling, general, and administrative expenses decreased as a percentage of revenue, indicating improved operational efficiency. Coherent's restructuring efforts, initiated in May 2023, resulted in $8 million in charges for the latest quarter, primarily related to site moves and employee terminations.

Coherent's strategic developments included the completion of a $1 billion investment in its subsidiary, Silicon Carbide LLC, which will enhance its capital expansion capabilities. The company also reported a significant increase in its customer base, particularly in the networking segment, which saw a 56% revenue increase year-over-year. The Lasers segment also performed well, with a 6% revenue increase, while the Materials segment faced a 4% decline due to weak automotive market demand.

In terms of financial health, Coherent's total assets decreased to $14.197 billion from $14.489 billion as of June 30, 2024. The company reduced its long-term debt to $3.833 billion from $4.026 billion, reflecting ongoing efforts to manage its capital structure. As of December 31, 2024, Coherent had cash and cash equivalents of $918 million, alongside $751 million in restricted cash, providing a solid liquidity position to support future growth initiatives.

Looking ahead, Coherent Corp. remains optimistic about its growth trajectory, particularly in the communications market, driven by AI and telecom recovery. The company anticipates that its restructuring plan will enhance operational efficiency and profitability, with expectations to complete these actions by the end of fiscal 2025. Management is focused on leveraging its vertical integration strategy to capitalize on market opportunities and improve its competitive position across its segments.