The following is a summary of the Coherent Corp. (COHR) Q1 2025 Earnings Call Transcript:

Financial Performance:

• Coherent reported a Q1 revenue of $1.35 billion, a 3% sequential increase and 28% year-over-year growth.

• Q1 non-GAAP gross margin expanded by 49 basis points sequentially due to higher revenue volume, favorable product mix, and yield improvements.

• Non-GAAP earnings per diluted share increased to $0.74, up from $0.61 in the previous quarter and from $0.16 year-over-year.

Business Progress:

• Coherent has initiated a strategic portfolio review, categorizing product lines into Growth Engines, Profit Engines, Long-Term Bets, and Non-Strategic, with plans to divest or shut down non-strategic assets, notably the planned sale of the Newton Aycliffe facility and exploring strategic options for the battery technology platform.

• The company is intensifying R&D investments in high-growth areas such as datacom transceivers, with significant advancements in 800-gig transceivers and plans to ramp up 1.6T transceivers in 2025.

Opportunities:

• Strong performance in datacom and telecom due to AI data center demand, leading to significant revenue growth in these sectors.

Risks:

• Telecom and market recovery remain uncertain, prompting a cautious outlook despite recent improvements in the telecom sector.

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