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

Strong momentum + demand visibility (good/surprising): Management said the quarter featured a step-up in orders/backlog to a record level, with orders extending out to calendar 2028 and customer LTAs to the end of the decade. They emphasized demand has “no signs of attenuation” and bookings are translating into near-term revenue/shipment opportunities—driving expectations for sustained strong revenue growth and faster growth in fiscal ’27 vs fiscal ’26.

Q3 financial performance (good): - Revenue: $1.8B (reported), +7% sequentially and +21% YoY (pro forma: +9% sequentially, +27% YoY). - Non-GAAP gross margin: 39.6%, up +57 bps sequentially and +105 bps YoY. - Non-GAAP EPS (diluted): $1.41, up +55% YoY (profitability growing faster than revenue). - Segment mix/strength: Datacenter & Communications = 75% of company revenue, up >40% YoY; data center specifically said to be +13% sequentially and +37% YoY, with growth expected to accelerate again in Q4.

Guidance for fiscal Q4 ’26 (key numbers): Management guided revenue $1.91B–$2.05B, non-GAAP gross margin 39%–41%, operating expenses $360M–$380M, tax rate 18%–20%, and non-GAAP EPS $1.52–$1.72. They framed this as sequential acceleration (June quarter expected to be stronger than Q3).