Coherent Corp - 6% PRF CONVERT 01/07/2023 USD 200 - Ser A

Q3 performance: accelerating growth + expanding profitability - Revenue: $1.8B, +7% sequentially, +21% YoY (pro forma: +9% seq, +27% YoY excluding sold businesses). - Non-GAAP gross margin: 39.6%, +57 bps QoQ and +105 bps YoY. - Non-GAAP EPS: $1.41, +9% QoQ and +55% YoY (EPS growth outpacing revenue due to margin expansion + leverage). - Overall message: Coherent is converting strong demand into shipments while improving margins faster than revenue.

Guidance for Q4 FY2026 (June quarter): strong sequential acceleration - Revenue: $1.91B to $2.05B (midpoint implies further acceleration vs Q3). - Non-GAAP gross margin: 39% to 41% (still rising sequentially). - OpEx (non-GAAP): $360M to $380M. - Non-GAAP EPS: $1.52 to $1.72. - Implied theme: backed by strong backlog/visibility and ongoing capacity ramp.

Demand & visibility: backlog step-function up; orders extend to 2028 - Jim Anderson highlighted a step increase in order book; backlog is at a record level. - Orders now extend into calendar 2028; customer LTAs to the end of the decade. - Management expects sustained strong revenue growth and fiscal ’27 growth rate to exceed fiscal ’26.