Coherent reported second-quarter revenue of $1.69 billion, marking a 17% year-over-year increase and a 22% pro forma gain after adjusting for the sale of its Aerospace & Defense business. GAAP gross margin expanded by 145 basis points to 36.9%, while non-GAAP gross margin rose 77 basis points to 39.0%. On a GAAP basis, diluted EPS was $0.76, up 71% year over year; non-GAAP diluted EPS reached $1.29, a 35% increase compared with the prior-year quarter.

Strength in the Data Center and Communications segment continued to be the primary growth driver, supporting broad-based revenue gains across product lines. The Industrial segment showed emerging momentum, contributing to overall margin expansion. R&D expenses as a percentage of revenue declined by 20 basis points to 9.8% on a GAAP basis, reflecting operational leverage from higher sales, while SG&A expense leverage improved by 4 basis points to 15.3%.

For the third quarter, management expects non-GAAP revenue between $1.70 billion and $1.84 billion and non-GAAP gross margin of 38.5% to 40.5%. Projected non-GAAP operating expenses are in the range of $320 million to $340 million, with a non-GAAP tax rate of 18% to 20%. Coherent continues to ramp capital investments to expand production capacity, targeting sustained growth through fiscal 2027 driven by elevated demand in datacenter and communications applications.