Coherent stock raises FY2027 growth bar after record Q1

Coherent Corp. reported a record fiscal first quarter on Wednesday, November 4, 2026, and raised its growth ambitions for the year ahead. The company said revenue for the quarter ended September 30 reached 2.37 billion US dollars, according to its fiscal first-quarter release.

Record sales widen the outlook

Revenue increased 49.9 percent from the year-earlier quarter and 15.9 percent from the fourth quarter of fiscal 2026. On a pro forma basis, which excludes the effect of divested businesses, revenue rose 56 percent year over year. Coherent said the quarter was driven by demand for optical connectivity as AI datacenters shift from copper toward optical networks.

The Datacenter and Communications segment generated 1.9517 billion US dollars, compared with 1.0900 billion US dollars a year earlier. Industrial revenue was 418.6 million US dollars, down from 491.4 million US dollars in the prior-year quarter. The contrast underlines how strongly the current expansion depends on datacenter and communications demand.

Margins and earnings move higher

GAAP gross margin rose to 39.1 percent from 36.6 percent a year earlier, while non-GAAP gross margin reached 40.6 percent, up from 38.7 percent. Non-GAAP operating income increased to 550.3 million US dollars from 308.9 million US dollars, lifting the operating margin to 23.2 percent from 19.5 percent.

GAAP diluted earnings per share came in at 1.90 US dollars, against 1.19 US dollars in the year-earlier quarter. Non-GAAP diluted earnings per share rose to 2.09 US dollars from 1.16 US dollars. The adjusted comparison excludes items such as share-based compensation, acquired-intangible amortization, restructuring and integration costs, so investors should distinguish the underlying operating trend from reported GAAP earnings.

Chief Executive Jim Anderson called the quarter a strong start to fiscal 2027 and said established businesses were growing while newer areas were beginning to ramp. Chief Financial Officer Sherri Luther attributed the margin expansion to pricing optimization and cost improvements.

Second-quarter targets lift the bar

For the second quarter of fiscal 2027, Coherent expects revenue between 2.55 billion and 2.75 billion US dollars. The company projects non-GAAP gross margin of 40 percent to 42 percent, operating expenses of 430 million to 450 million US dollars and non-GAAP diluted earnings per share of 2.28 to 2.48 US dollars.

Management now expects fiscal 2027 pro forma revenue growth to exceed 60 percent, more than double the pro forma growth rate for fiscal 2026. It also expects a first 3 billion US dollar revenue quarter by the end of fiscal 2027 and a first 4 billion US dollar quarter in fiscal 2028. Luther said Coherent expects its first quarter with non-GAAP gross margin above 45 percent before the end of calendar 2028.

Coherent stock traded at 173.13 euros on Lang & Schwarz at 13:30 CET on Monday, November 9, 2026.

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Investors will now focus on whether AI-related optical demand can support the elevated fiscal 2027 growth path while Coherent expands capacity and protects its recent margin gains. The next quarterly update will test the company's second-quarter targets and the pace of progress toward the first 3 billion US dollar revenue quarter.

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