Coherent Corp. delivered Q2 fiscal 2026 revenue of $1.69 billion, marking a 17.5% year-over-year increase and a 6.6% sequential rise from Q1. On a pro forma basis excluding its Aerospace & Defense business sale, revenue grew 22% versus the prior year. Non-GAAP earnings per diluted share reached $1.29, up 35% year-over-year and 12% quarter-over-quarter, driven by robust sales in its photonics portfolio and disciplined cost control measures.

CEO Jim Anderson attributed the quarter’s outperformance to continued strong demand in the Data Center and Communications segment. That unit represented approximately 60% of overall sales, growing by over 20% year-over-year. Investments in capacity expansion at manufacturing sites in Saxonburg, Pennsylvania and Jena, Germany ramped output to meet large enterprise orders for high-power lasers used in optical interconnects and coherent communications.

Coherent achieved a Q2 GAAP gross margin of 36.9%, up 145 basis points from the prior year, while non-GAAP gross margin expanded by 77 basis points to 39.0%. Operating expenses on a non-GAAP basis rose modestly to $321 million, representing 19.1% of revenue, as the company continued to invest in R&D and targeted integration of recent acquisitions. These efficiencies contributed to a 147 basis-point improvement in non-GAAP operating margin, which reached 19.9%.

For Q3 fiscal 2026, management guided non-GAAP revenue between $1.70 billion and $1.84 billion, representing year-over-year growth of 1% to 9%. The company expects non-GAAP EPS in a range of $1.28 to $1.48, based on projected gross margins of 38.5% to 40.5% and operating expenses of $320 million to $340 million. CFO Sherri Luther highlighted ongoing capital investments to further expand production capacity and support anticipated strength in both Data Center and Industrial end markets.