Coherent (NASDAQ: COHR) Posts Q4 FY2026 Beat With 33.8% Revenue Growth, Issues Above-Consensus Q1 Guidance

Coherent Corp. (NASDAQ: COHR) reported fiscal fourth-quarter 2026 results on August 12, delivering revenue of $2.05 billion and adjusted EPS of $1.74, both above analyst consensus. The company also issued first-quarter fiscal 2027 guidance that exceeded Wall Street expectations on revenue and earnings per share.

Q4 FY2026 Results

• Revenue of $2,045.5 million rose 33.8% year over year from $1,529.4 million in Q4 FY2025, beating the $1.986 billion analyst estimate.
• Adjusted EPS of $1.74 beat the $1.65 consensus estimate, up 74.0% from $1.00 in the year-ago quarter. GAAP EPS was $1.19, compared to a GAAP loss per share of $0.83 a year earlier.
• GAAP gross margin expanded 277 basis points year over year to 38.5%; non-GAAP gross margin reached 40.2%, up 215 basis points.
• GAAP operating income rose to $254 million from $6 million in Q4 FY2025, a 4,063.9% increase; non-GAAP operating income of $446 million grew 62.1% year over year.
• Non-GAAP operating margin reached 21.8%, up 381 basis points from 18.0% in the prior-year quarter.

What Drove the Results

Adjusted EPS of $1.74 beat the $1.65 consensus by 5.5%, while revenue of $2.05 billion exceeded the $1.986 billion estimate. The operating leverage embedded in the quarter was substantial: GAAP SG&A as a percentage of revenue fell 302 basis points year over year to 13.0%, while non-GAAP gross margin expanded 215 basis points, converting top-line growth into disproportionate earnings expansion. On a full-year basis, non-GAAP EPS of $5.61 grew $2.08 versus the prior fiscal year, more than twice the 22.5% rate of revenue growth to $7.12 billion.

The GAAP and non-GAAP EPS figures diverge materially, primarily due to acquired intangible amortization, share-based compensation, restructuring charges of $6.1 million in Q4 (down from $53.9 million in Q4 FY2025), and a $44.3 million impairment of assets held for sale recorded in the quarter. Removing those items lifts reported net income from $240.5 million GAAP to $351 million on an adjusted basis.

Capital expenditures for the full fiscal year totaled $1.10 billion, up 150.2% from $440.8 million in FY2025, as Coherent invested heavily in manufacturing capacity. Operating cash flow for the year was $79.5 million, producing negative free cash flow of approximately $1.02 billion for FY2026. CEO Jim Anderson stated that the company enters fiscal 2027 with expanding production capacity and multiple new growth platforms beginning to ramp, with AI datacenter architectures increasingly transitioning from copper to optical connectivity.

Forward Guidance

For the first quarter of fiscal 2027, Coherent guided revenue of $2.2 billion to $2.4 billion, above the $2.135 billion analyst consensus. Non-GAAP EPS guidance of $1.85 to $2.05 also exceeded the $1.77 estimate. Non-GAAP gross margin for Q1 is expected between 39.5% and 41.5%, with non-GAAP operating expenses of $400 million to $420 million and a non-GAAP tax rate of 18% to 20%.

Wall Street View

Analyst consensus heading into the print stood at a strong buy-leaning posture, with 23 buy-equivalent ratings against 7 holds and no sells as of August 1, 2026. Shares gained 8.24% on Wednesday, August 12, while the S&P 500 rose 0.25%.

Investor Takeaway

The Q4 beat and above-consensus Q1 guidance confirm that Coherent's revenue scaling is translating into earnings leverage, with non-GAAP EPS growing at more than twice the rate of revenue in FY2026. The key forward variable is whether the $1.10 billion capital expenditure cycle, which pressured free cash flow to negative $1.02 billion this fiscal year, begins to generate commensurate capacity-driven revenue growth in FY2027 at the rate the Q1 guidance range implies.