Q4 2024 Coherent Corp Earnings Call Transcript
Key Points
- Revenue in Q4 increased by approximately 9% both sequentially and year over year, driven primarily by strong growth in datacom transceivers for AI data center deployments.
- Non-GAAP gross margin expanded by 145 basis points sequentially due to recovery from transitory issues that impacted Q3.
- Non-GAAP EPS grew by 16% sequentially and by almost 50% year over year as a result of top-line growth and margin expansion.
- Strong growth in the communications end market, with Q4 revenue increasing by 10% sequentially and by 19% year over year.
- The company has initiated changes to simplify organizational structure, empower leaders, streamline decision-making, and accelerate execution.
- Telecom revenue declined by 6% sequentially and 38% year over year due to end-market weakness.
- Gross margin is currently too low, with a target to operate at a consistent sustainable gross margin level above 40%.
- Operating expenses increased sequentially, including year-end bonus and benefit adjustments and Term Loan B refinancing fees.
- The industrial end market is expected to remain soft in the near term despite some sequential growth.
- The company is still in the process of filling the CFO role, which may impact financial strategy and execution in the short term.
Good day and thank you for standing by, and welcome to the Coherent Corp. FY24 fourth-quarter earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)
I would now like to hand the conference over to your speaker today, Paul Silverstein, Senior Vice President, Investor Relations and Corporate Communications.
Good afternoon, everyone. With me today are Jim Anderson, Coherent's CEO; and Rich Martucci, Coherent's Interim CFO.
During today's call, we will provide a financial and business review of the fourth quarter of fiscal 2020 for the business outlook for the first quarter of fiscal 2025. Our earnings press release can be found in the Investor Relations section of our company website at coherent.com.
I would like to remind everyone that during our conference call today, we may make projections or other forward-looking statements regarding future events
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