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

FY26 delivered strong growth + margin/earnings leverage - Revenue: $7.12B (FY26) +23% YoY; on a pro forma basis +28% to a record $7B+. - Q4: revenue $2.05B (+13% sequential, +34% YoY); pro forma +14% sequential, +42% YoY. - Profitability: gross margin up (Q4 40.2%, +66 bps QoQ, +215 bps YoY; FY26 39.4%, +152 bps YoY). - Earnings: non-GAAP EPS $5.61 (+59% YoY); Q4 non-GAAP EPS $1.74 (+74% YoY). - Operating leverage + efficiency: non-GAAP operating margin Q4 21.8% (up vs 20.3% QoQ and 18.0% YoY).

Q1 FY27 guidance (company’s near-term “proof point”) - Revenue expected $2.2B–$2.4B. - Non-GAAP gross margin expected 39.5%–41.5%. - Non-GAAP operating expenses $400M–$420M. - Tax rate 1.8%–14% (as stated on call). - Non-GAAP EPS expected $1.85–$2.05. - (Key investor takeaway: management expects continued gross margin improvement and EPS growth outpacing revenue again.)

Fiscal 27 outlook is “acceleration mode” (major demand + capacity + new ramps) - Management expects growth to accelerate significantly in FY27. - Revenue target milestone: first $2B revenue quarter achieved, and they now expect Q1 FY27 to be >$3B revenue by end of FY27 (directionally signaling rapid scaling). - Demand strength: record bookings again, no signs of attenuation, order coverage extends through calendar 27 and into calendar 28, LTAs “through the end of the decade.” - Company explicitly frames optical/photonic momentum as multi-year: AI data center growth + copper-to-optical transition + bandwidth/energy efficiency needs.