Coherent Reports Strong Q2 2025 Earnings; Revenue Grows 27% YoY

Coherent's fiscal second quarter report indicates a strong upward trajectory, with revenue reaching a record $1.43 billion. The results reflect robust demand, primarily driven by the AI data center market and telecom sector recovery. Investors are encouraged by this performance.

Date: 06-02-2025

AI Rating: 7

Performance Overview: Coherent's fiscal second quarter (Q2) 2025 results show significant growth, particularly in revenue where it increased by 27% year-over-year (YoY) to a record $1.43 billion. This has been driven by a solid performance in AI-related datacom segments and a rebound in telecom revenue.

Earnings Per Share (EPS): Non-GAAP earnings per diluted share saw impressive growth, rising over 40% sequentially and more than tripling on a year-over-year basis, highlighting the company’s ability to enhance profitability alongside revenue growth.

Revenue Growth: The revenue increase was segmented, with Q2 networking revenue increasing by 56% year-over-year and datacom revenues achieving a significant 79% year-over-year growth due to heightened demand for AI-related data services. This growth trend indicates strong market demand and efficient execution of the company's strategies.

Profit Margins: Coherent achieved a non-GAAP gross margin of 38.2%, up 146 basis points compared to the previous quarter and up 363 basis points year-over-year. This improvement reflects effective cost management and pricing strategies that are crucial for sustaining profitability as revenue grows.

Future Outlook: The company is anticipating continued growth, especially in the telecom segments, where they expect sequential revenue growth. The planned enhancements in indium phosphide production capacity are also expected to support the continued expansion in datacom products.

Stocks: COHR