Abstract
Coherent will report fiscal results on February 04, 2026 Post Market, with investors watching revenue growth, margin recovery, and AI-driven datacom optics demand; our preview synthesizes company forecasts and recent quarter trends to frame expectations for revenue, profitability, and adjusted EPS against year-ago levels.
Market Forecast
- For the current fiscal quarter, Coherent’s internal forecast points to revenue of $1.64 billion, representing an estimated year-over-year growth of 19.23%, alongside forecasted EBIT improvement and an estimated adjusted EPS of $1.21, which implies a 74.86% year-over-year increase. Gross margin and net margin guidance were not explicitly detailed in the forecast dataset, though the previous quarter’s profitability trajectory suggests continued margin recovery.
- Coherent’s core business remains anchored by Datacom & Communications and Industrial. The company highlights solid order trends in AI-related optical interconnects that support revenue visibility. Datacom & Communications is the most promising segment, with last quarter revenue of $1.09 billion and a favorable year-over-year growth backdrop tied to accelerating 800G/1.6T transitions in cloud networks.
Last Quarter Review
- Coherent’s last reported quarter delivered revenue of $1.58 billion, gross margin of 36.63%, GAAP net profit attributable to shareholders of $0.23 billion, a net margin of 14.31%, and adjusted EPS of $1.16. Quarter-on-quarter net profit growth was 336.72%.
- Operating performance benefited from improving mix toward higher-value datacom transceivers and disciplined cost execution, which supported margin expansion. Main business highlights: Datacom & Communications revenue was $1.09 billion, while Industrial contributed $0.49 billion, with Datacom & Communications posting the stronger momentum on AI/cloud optical deployments.
Current Quarter Outlook (with major analytical insights)
Main business: Datacom & Communications
Datacom & Communications is positioned to lead near-term performance given cloud capex tied to AI workloads and faster adoption of 800G optics, while early 1.6T qualifications begin to contribute. Coherent’s vertical capabilities in lasers, wafers, and components enhance supply assurance and cost control, supporting price realization and gross margin resilience. Management’s revenue estimate of $1.64 billion embeds continued strength from hyperscale customers and backlog conversion, suggesting sequential momentum from the $1.09 billion run-rate in the prior quarter for this segment. A key watchpoint is shipment mix versus pricing pressure in certain transceiver categories; however, product transitions to higher-speed modules typically lift average selling prices and support dollar content per rack. We also expect ongoing normalization in telecom to be offset by datacenter strength, with bookings likely to remain constructive as cloud providers expand AI clusters.
Most promising business: AI-accelerated optical interconnects
AI-accelerated optical interconnects within Datacom remain the largest growth vector, underpinned by hyperscale deployments that require bandwidth density and power efficiency. The company’s exposure to 800G and early 1.6T solutions expands both unit volume and bill of materials, which can bolster revenue growth and operating leverage. As customers prioritize high-speed links and better thermal profiles, Coherent’s integrated photonics and advanced packaging capabilities are differentiators that can sustain above-company-average growth. We expect year-over-year revenue expansion in this sub-segment to outpace the broader portfolio, anchoring the forecast 19.23% revenue growth for the quarter and supporting the forecasted adjusted EPS of $1.21. Potential risks include supply-chain tightness in certain components and qualification cycles that could influence delivery timing.
Key stock drivers this quarter: Margins, mix, and AI-capex durability
Stock performance this quarter should hinge on margin trajectory, revenue mix, and signals from large cloud customers regarding AI-capex cadence through calendar 2026. The prior quarter’s gross margin of 36.63% and net margin of 14.31% indicate material improvement, and maintaining or expanding these levels is central to upside cases given the forecasted EBIT growth of 44.28% year over year. Higher-mix Datacom content and improved factory utilization can aid gross margin, while disciplined opex supports adjusted EPS leverage. Commentary on supply readiness for 1.6T production, pricing dynamics, and industrial laser orders will also influence sentiment. Investors will look for evidence that book-to-bill remains healthy and that datacenter orders are broad-based across multiple hyperscalers rather than concentrated.
Analyst Opinions
The majority of recent institutional commentary trends constructive, with a greater share of bullish versus cautious opinions centered on AI-driven demand, product transitions to 800G/1.6T, and operating margin recovery. Positive views emphasize that revenue is poised to grow by 19.23% year over year this quarter with adjusted EPS projected at $1.21, reflecting operating leverage and product mix tailwinds. Well-followed analysts highlight that the company’s EBIT forecast of $0.33 billion implies continued improvement in profitability, while any incremental clarity on hyperscale spending plans could catalyze estimate revisions. The bullish camp also points to prior quarter execution—surpassing revenue and EPS expectations—as support for near-term confidence. In sum, the majority view anticipates a solid quarter with potential upside if gross margin holds near the prior quarter’s 36.63% and if Datacom revenues continue to benefit from AI infrastructure buildouts.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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