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

Fiscal 26 performance = record scale + operating leverage - Revenue $7.12B (first time Coherent exceeded $7B), +23% YoY and +28% pro forma. - Q4 revenue $2.05B, +34% YoY and +13% sequentially (pro forma +42% YoY, +14% sequentially). - Non-GAAP EPS: $5.61 for FY26, +59% YoY (faster than revenue growth). Q4 non-GAAP EPS $1.74, +74% YoY. - Profitability improvements: Q4 non-GAAP gross margin 40.2% (+66 bps sequential, +215 bps YoY); FY26 non-GAAP gross margin 39.4% (+152 bps YoY). - Balance sheet: debt leverage improved to 0.7x (from 2x at FY25). Cash $2.59B at FY end.

Fiscal 27 guidance (near-term) is strong and explicitly EPS-led - Q1 FY27 revenue: $2.2B–$2.4B - Q1 FY27 non-GAAP gross margin: 39.5%–41.5% - Q1 FY27 non-GAAP EPS: $1.85–$2.05 - Q1 FY27 tax rate: ~1.8%–3.0% (non-GAAP) - Q1 FY27 non-GAAP op ex: $400M–$420M - Company commentary: expects gross margin expansion and operating leverage so that EPS grows faster than revenue.

Key growth engine: AI data center + communications; demand visibility extended - Data center + communications drove most growth; in Q4 the data center + communications segment was 79% of total revenue. - Data center FY26 revenue +41%; Q4 data center revenue +66% YoY and +24% sequentially (3rd straight quarter of double-digit sequential growth expected to continue). - Bookings: “another quarter of record bookings,” with exceptional order coverage: - Orders extend into calendar 2028 - Customer LTAs extend through end of the decade - Management cites no signs of demand attenuation.