Coherent Q1 2027: Optical Boom Pushes Revenue to $2.37 Billion
As seen on the 24/7 Wall St. homepage on November 4, 2026.
AI datacenters switching from copper to optical now drive 82% of Coherent's sales, and management guided fiscal 2027 pro forma revenue growth above 60% with its first $3 billion quarter expected by year-end. Both lines beat expectations.
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Coherent posted adjusted EPS of $2.09 for its fiscal first quarter of 2027, beating the consensus estimate of $1.97. It was the fourth consecutive quarter in which the company topped Wall Street's earnings-per-share forecast.
Revenue came in at $2.37 billion, ahead of estimates and up roughly 50% year over year. The growth was concentrated in a single theme: AI datacenters swapping copper interconnects for optical ones, with the Datacenter and Communications segment now accounting for 82% of total company sales.
Non-GAAP gross margin expanded to 40.6% and non-GAAP operating margin rose to 23.2%. Those improvements came even as capital expenditures surged to $775.5 million, funding a capacity build that doubled internal indium phosphide output compared to a year ago, one quarter ahead of schedule.
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CEO Jim Anderson guided fiscal 2027 pro forma revenue growth above 60% and said management expects the company's first $3 billion revenue quarter by fiscal year-end. For Q2, Coherent guided revenue of $2.55 billion to $2.75 billion. Longer-term, the company targets a first $4 billion quarter in fiscal 2028 and a non-GAAP gross margin above 45% before the end of calendar 2028.
Operating cash flow was negative $92.7 million in the quarter, as the aggressive capacity expansion and inventory build consumed cash faster than operations generated it. The company raised financing cash of $664.6 million to help fund the buildout, adding to debt levels. Whether the revenue ramp materializes fast enough to offset those pressures will be a key question heading into Q2 results.
Mentioned: COHR