Coherent Corp. Reports 24% Revenue Growth to $1.498 Billion in Latest Quarter

Coherent Corp. reported significant financial performance improvements in its latest quarterly filing, with revenues for the three months ended March 31, 2025, reaching $1.498 billion, a 24% increase from $1.209 billion in the same period last year. The growth was driven primarily by a 46% surge in the communications market, particularly in datacom, attributed to strong demand related to AI datacenter applications. For the nine months ending March 31, 2025, total revenues increased by 26% to $4.281 billion compared to $3.393 billion in the prior year. The company also reported net earnings attributable to Coherent Corp. of $15.7 million for the quarter, a turnaround from a net loss of $13.2 million in the same quarter of the previous year.

The company experienced notable changes in its cost structure, with gross margins improving to 35% of total revenues for the latest quarter, up from 30% a year earlier. This increase was attributed to higher revenue volumes, pricing optimization, and cost reductions, despite some unfavorable product mix impacts. Operating expenses, including research and development and selling, general, and administrative costs, were managed effectively, with R&D expenses remaining stable at 10% of revenues. However, restructuring charges rose significantly to $74 million for the quarter, reflecting ongoing site consolidations and workforce reductions as part of the company's strategic restructuring plans.

Coherent's operational metrics also indicated positive trends, with the Networking segment reporting a 45% revenue increase year-over-year, driven by AI datacenter demand. The Lasers segment saw a 4% revenue increase, while the Materials segment experienced a slight decline of 1%. The company’s total assets as of March 31, 2025, were reported at $14.445 billion, with total liabilities decreasing to $6.276 billion from $6.542 billion a year earlier, indicating improved financial health.

Strategically, Coherent has been focusing on restructuring efforts to streamline operations and enhance efficiency. The company has initiated a 2025 Restructuring Plan, which includes site consolidations and workforce reductions, expected to incur charges of approximately $63 million. Additionally, Coherent successfully raised $1 billion through equity investments in its subsidiary, Silicon Carbide LLC, which will be used to fund future capital expansions and enhance operational flexibility.

Looking ahead, Coherent Corp. anticipates continued growth driven by strong demand in its communications and industrial markets, particularly in AI-related applications. The company expects to leverage its restructuring initiatives to improve operational efficiency and profitability further. Management remains optimistic about the company's ability to navigate market challenges and capitalize on emerging opportunities, supported by a solid cash position and available borrowing capacity.