Coherent Corp.

- In Q3, Coherent received a $2 billion equity investment from NVIDIA, boosting cash balance from $1.5 billion to $3 billion. - The company focused on debt repayment during the quarter, making $162 million in debt payments and reducing its debt leverage ratio from 1.7x in Q2 to 0.5x in Q3. - No mention of new or planned fundraising through debt or equity beyond the NVIDIA equity investment. - Capital expenditures increased to $290 million in Q3 to support production capacity expansion; further increases expected in Q4. - The company emphasizes disciplined capital allocation to drive long-term growth and shareholder value, with no indication of immediate plans for additional fundraising.

- Strategic focus on rapidly expanding internal capacity to support growing data center and communications demand. - Capital expenditures (CapEx) increased to $290 million in Q3, up from $154 million prior quarter and $112 million year ago, aimed at capacity expansion. - Expect sequential increase in CapEx in Q4, continuing capacity expansion plans. - Investments targeted at data center & communications business and R&D product roadmap, supporting long-term revenue growth and profitability. - Significant investment in 6-inch indium phosphide capacity ramp—targeting doubling capacity next quarter and more than doubling again next calendar year (quadrupling over two years). - Multiple new growth areas: OCS ramping with capacity expansion, CPO revenue starting in second half of 2026, multi-rail systems revenue expected in first half 2027, thermal solutions revenue starting second half 2027. - Customer Long-Term Agreements (LTAs) include upfront investments to fund CapEx, reflecting strong demand visibility.

- Expect accelerating revenue growth with a new inflection point in the June quarter and fiscal 2027 growth rate above fiscal 2026. - Significant demand and visibility, with record bookings and backlog extending into calendar 2028. - Expansion driven by data center (transceivers, especially 800G and 1.6T) and communications segments. - Major capacity ramp via doubling indium phosphide capacity by end of calendar 2026, expected a quarter earlier than planned; another doubling by end of 2027. - 6-inch indium phosphide ramp to drive both volume and gross margin improvements. - Growth vectors: OCS systems revenue ramping now; CPO revenue starting second half of calendar 2026; multi-rail systems and thermal solutions contributing in calendar 2027. - LTAs securing upfront funding and demand commitments, with deals from both hyperscalers and systems manufacturers. - Overall strong momentum and expanding market opportunities offer significant volume and revenue upside.

- Coherent expects accelerating revenue growth with a new inflection point starting in the June quarter and fiscal '27 growth rate to exceed fiscal '26. - Strong demand and record backlog support sustained strong revenue growth through calendar 2028. - Non-GAAP gross margin is expanding sequentially, driven by 6-inch indium phosphide capacity ramp, cost reductions, yield improvements, and pricing optimization. - Operating expenses are increasing due to higher R&D investments focused on growth drivers like transceivers, CPO, OCS, and multi-rail systems. - Non-GAAP operating margin improved to 20.3% in Q3 and is expected to continue expanding with revenue growth and cost efficiencies. - Non-GAAP EPS grew 55% year-over-year in Q3, with further acceleration expected as earnings growth outpaces revenue. - LTAs (long-term agreements) with customers, including NVIDIA, underpin multi-year supply and revenue visibility, supporting profitable growth.

- Bookings in the prior quarter were up substantially from the previous quarter, reflecting record bookings and an incredible amount of backlog. - Orders now extend out into calendar 2028, providing strong demand visibility. - Demand is exceptional across key sectors such as data center, transceivers, and communications. - Long-term agreements (LTAs) signed recently include supply commitments and often involve upfront customer investments to support capital expenditure. - Additional LTAs are expected to close soon, covering both hyperscalers and systems manufacturers. - The strong backlog supports the company's plans to rapidly expand internal capacity and production to meet demand.