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Coherent And NVIDIA’s $2 Billion Bet — Is Co-Packaged Optics The Breakthrough?

Coherent Inc., a global leader in photonic technology, reported strong financial results for the third quarter of fiscal year 2026, driven primarily by robust demand in AI data center and communications markets. Revenue reached a company record of $1.8 billion, reflecting a 9% sequential and 27% year-over-year increase on a pro forma basis, excluding divested businesses. The strong revenue growth was accompanied by gross margin expansion to 39.6%, a 57 basis point sequential improvement and a 105 basis point increase year-over-year. Non-GAAP operating margin improved to 20.3%, and EPS grew 55% year-over-year to $1.41 on a non-GAAP basis, illustrating operating leverage and margin gains outpacing revenue growth. The Datacenter & Communications segment was the primary growth engine, accounting for 75% of revenue with a 40% year-over-year increase. Within this segment, data center revenue increased 13% sequentially and 37% annually, fueled by transceiver sales (800 gig and 1.