Coherent Q4 Revenue Up 34% Beating Expectations, Data Center Revenue Up 59%, Stock Falls 5% After Hours
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Coherent posted Q4 revenue of $2.05 billion — up 34% year-over-year — with data center sales surging 59%, beating estimates on every line. The stock still dropped 5% after hours: the market's bar for AI optical-interconnect suppliers has already been raised sky-high.
How strong was this quarter, really?
Non-GAAP EPS hit $1.74, nearly double the year-ago $1.00, topping Wall Street consensus by $0.12.
Quarterly revenue reached $2.05 billion, up 34% year-over-year, beating analyst estimates by roughly $60 million.
This means → on both profit and revenue, Coherent cleared the market's most optimistic numbers by a wide margin.
Where did the fastest growth come from?
Data center revenue jumped 59% year-over-year — the single biggest growth driver this quarter.
This reflects the accelerating demand from AI infrastructure for optical interconnects — technology that moves data between servers using light instead of electricity, enabling higher speed at lower power.
In plain terms = AI training and inference need massive data flowing between chips at extreme speed. Light beats copper. Coherent sits squarely on that "optical highway" as a key supplier.
What does next quarter's guidance look like?
Management guided Q1 FY2027 adjusted EPS to $1.85–$2.05 and revenue to a midpoint of roughly $2.3 billion.
Analysts had expected EPS of $1.77 and revenue of $2.13 billion — the guide lifts both numbers meaningfully.
This means → the company is not just reporting a strong past; it is telling the market the next quarter will be even better.
If the results are this good, why did the stock fall after hours?
Shares dropped about 5% after hours to $338.62 — but the stock had already risen 8.2% during regular trading and is up over 200% in the past 12 months.
According to Barron's, rival Lumentum Holdings posted strong results on Tuesday, raising the expectations bar for Coherent even before its own report landed.
In plain terms = the good news was already "priced in." Investors weren't looking for a beat — they were looking for a blowout. A beat that wasn't big enough became a sell signal.
What should investors watch next?
Whether data center's 59% growth rate can hold in coming quarters is the key test of the AI optical-interconnect demand trajectory.
Whether the $2.3 billion Q1 revenue guide actually materializes will directly shape confidence in Coherent's growth story.
This means → the after-hours dip is short-term sentiment digestion. The real exam ahead is whether growth can keep pace with an ever-rising expectations base.
Content is for reference only, not financial advice.