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COHERENT CORP.

COHERENT CORP.COHR決算レポート

NYSE · 産業 · 光学機器及びレンズ

Coherent Corp. is an American manufacturer of optical materials and semiconductors. As of 2023, the company had 26,622 employees. Their stock is listed at the New York Stock Exchange under the ticker symbol COHR. In 2022, II-VI acquired laser manufacturer Coherent, Inc., and adopted its name.

What changed in COHERENT CORP.'s 10-K — 2024 vs 2025

Top changes in COHERENT CORP.'s 2025 10-K

419 paragraphs added · 572 removed · 245 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

81 edited+32 added−107 removed15 unchanged
We vertically integrate from the material level (with various crystals for medical laser applications, or ZnS materials for NIR and IR spectroscopy) to high-precision components, complex subassemblies, and even full subsystems. Applications within the biotechnology segment include research and diagnostic tools such as flow cytometry, genome sequencing, PCR, and sequencing, to name a few.
We vertically integrate from the material level (with various crystals for medical laser applications, or ZnS materials for NIR and IR spectroscopy) to high-precision components, complex subassemblies, and even full subsystems. Applications within the biotechnology segment include research and diagnostic tools such as flow cytometry, genome sequencing, and PCR, to name a few.
From 2016 to 2020, she was the Senior Vice President, Chief Accounting Officer, and Global Controller at Anixter International Inc., where she helped close the sale of Anixter to Wesco. From 2011 to 2016, Ms. Mocciaro was the Chief Accounting Officer of the agricultural and construction equipment segments at CNH Industrial N.V., after serving as Director of Accounting and Reporting.
From 2016 to 2020, she was Senior Vice President, Chief Accounting Officer, and Global Controller at Anixter International Inc., where she helped close the sale of Anixter to Wesco. From 2011 to 2016, Ms. Mocciaro was the Chief Accounting Officer of the agricultural and construction equipment segments at CNH Industrial N.V., after serving as Director of Accounting and Reporting.
Department of State, Directorate of Defense Trade Controls, which among other things impose licensing requirements on the export from the United States of certain defense articles and defense services, generally including items that are specially designed or adapted for a military application and/or listed on the United States Munitions List; • The Export Administration Regulations administered by the U.S.
Department of State, Directorate of Defense Trade Controls, which among other things impose licensing requirements on the export from the United States of certain defense articles and defense services, generally including items that are specially designed or adapted for a military application and/or listed on the United States Munitions List; • The Export Administration Regulations (EAR) administered by the U.S.
The ability to produce, process, and refine these complex materials, and to control their quality and in-process yields, is an expertise of the Company that is critical to our customers. In the markets we serve, there is a limited number of high-quality suppliers of many of the components we manufacture. Aside from datacenter transceivers, there are very few industry-standard products.
The ability to produce these complex materials, and to control their quality and in-process yields, is an expertise of the Company that is critical to our customers. In the markets we serve, there is a limited number of high-quality suppliers of many of the components we manufacture. Aside from datacenter transceivers, there are very few industry-standard products.
None of the information on, or accessible through, Coherent’s website is part of this Annual Report on Form 10-K, nor is it incorporated herein by reference. Sources of Supply In our production processes, we use numerous optical, electrical, and mechanical parts that are sourced from third-party suppliers.
None of the information on, or accessible through, our website is part of this Annual Report on Form 10-K, nor is it incorporated herein by reference. Sources of Supply In our production processes, we use numerous optical, electrical, and mechanical parts that are sourced from third-party suppliers.
Trade Secrets, Patents, and Trademarks 21 Our use of trade secrets, proprietary know-how, trademarks, copyrights, patents, contractual confidentiality, and IP ownership provisions helps us develop and maintain our competitive position with respect to our products and manufacturing processes. We aggressively pursue process and product patents in certain areas of our businesses and in certain jurisdictions across the globe.
Trade Secrets, Patents, and Trademarks Our use of trade secrets, proprietary know-how, trademarks, copyrights, patents, contractual confidentiality, and IP ownership provisions helps us develop and maintain our competitive position with respect to our products and manufacturing processes. We aggressively pursue process and product patents in certain areas of our businesses and in certain jurisdictions across the globe.
We are a global technology leader in optical communications, providing materials, subcomponents, components, modules, and subsystems to optical component and module manufacturers, networking equipment manufacturers, datacenter operators, enterprises, and telecom service providers. We design products that meet the increasing demands for network bandwidth and data storage.
We are a global technology leader in optical communications, providing materials, subcomponents, components, modules, subsystems, and systems to optical component and module manufacturers, networking equipment manufacturers, datacenter operators, enterprises, and telecom service providers. We design products that meet the increasing demands for network bandwidth and data storage.
It is our highest priority to keep our employees, customers, and suppliers safe, as the health and safety of our workforce is paramount to the success of our business. We provide our employees upfront and ongoing training to ensure that safety policies and procedures are effectively communicated and implemented.
Occupational Health and Safety . It is our highest priority to keep our employees, customers, and suppliers safe, as the health and safety of our workforce is paramount to the success of our business. We provide our employees upfront and ongoing training to ensure that safety policies and procedures are effectively communicated and implemented.
Industrial Market Group • Precision Manufacturing Market Vertical. Our Precision Manufacturing vertical encompasses a broad range of applications across very diverse markets. With complete verticality, from materials to turnkey laser solutions, we intersect with any industrial laser process within the application areas of automotive manufacturing, medical device manufacturing, machine tools, consumer goods, and industrial electrical and electronics.
Our Precision Manufacturing vertical encompasses a broad range of applications across very diverse markets. With complete verticality, from materials to turnkey laser solutions, we intersect with any industrial laser process within the application areas of automotive manufacturing, medical device manufacturing, machine tools, consumer goods, and industrial electrical and electronics.
Executive Officers of the Registrant The executive officers of the Company and their respective ages and positions as of June 30, 2024, are set forth below. Each executive officer listed has been appointed by the Board of Directors to serve until removed or until a successor is appointed and qualified.
Executive Officers of the Registrant The executive officers of the Company and their respective ages and positions as of June 30, 2025, are set forth below. Each executive officer listed has been appointed by the Board of Directors to serve until removed or until a successor is appointed and qualified.
Foreign governments also have similar import and export control, and sanctions, laws, and regulations. For additional discussion regarding our import, export, and sanctions compliance, see the discussion in Item 1A. Risk Factors of this Annual Report on Form 10-K.
Foreign governments also have similar import and export controls, sanctions, laws, and regulations. For additional discussion regarding our import, export, and sanctions compliance, see the discussion in Item 1A. Risk Factors of this Annual Report on Form 10-K.
We also make our corporate governance documents available on our website, including the Company’s Code of Ethical Business Conduct, Governance Guidelines, and the charters for our board committees. All such documents are located on the Investors page of our website and are available free of charge. 23
We also make our corporate governance documents available on our website, including the Company’s Code of Ethical Business Conduct, Governance Guidelines, and the charters for our board committees. All such documents are located on the Investors page of our website and are available free of charge. 15
We have entered into selective intellectual property licensing agreements. We have confidentiality and noncompetition agreements with certain personnel. We require our U.S. employees to sign a confidentiality and noncompetition agreement upon commencement of their employment with us. As of June 30, 2024, we had a total of approximately 3,100 patents globally.
We have entered into selective IP licensing agreements. We have confidentiality and noncompetition agreements with certain personnel. We require our U.S. employees to sign a confidentiality and noncompetition agreement upon commencement of their employment with us. As of June 30, 2025, we had a total of approximately 3,100 patents globally.
KG • Wolfspeed, Inc In addition to competitors who manufacture products similar to those we produce, there are other technologies and products available that may compete with our technologies and products.
In addition to competitors who manufacture products similar to those we produce, there are other technologies and products available that may compete with our technologies and products.
Our Strategy Our strategy is to grow businesses with world-class engineered materials and laser processing capabilities to advance our current customers’ strategies, reach new markets through innovative technologies and platforms, and enable new applications in large and growing markets.
Our Strategy Our strategy is to grow businesses with world-class lasers, optics, and engineered materials to advance our current customers’ strategies, reach new markets through innovative technologies and platforms, and enable new applications in large and growing markets.
Manufacturing Processes Our success in developing and manufacturing many of our products depends on our ability to tailor the optical and physical properties of technically challenging materials, components, and photonics-based solutions across a broad array of industries.
Manufacturing Processes Our success in developing and manufacturing many of our products depends on our ability to tailor the optical and physical properties of technically challenging materials, components, and photonics-based solutions across our target markets.
Julie Sheridan Eng was appointed Chief Technology Officer of the Company in October 2022. Prior to becoming CTO, Dr. Eng served as Senior Vice President and General Manager of the Company’s Optoelectronic Devices and Modules Business Unit. Dr.
Julie Sheridan Eng was named Chief Technology Officer (“CTO”) of Coherent in 2022. Prior to becoming CTO, Dr. Eng served as Senior Vice President and General Manager of the Optoelectronic Devices and Modules Business Unit.
These include integrated circuits, digital signal processors, mechanical housings, and optical components, and we commonly refer to them as raw materials. Raw materials or subcomponents required in the manufacturing process are generally available from several sources.
These include ICs, DSPs, mechanical housings, and optical components, and we commonly refer to them as raw materials. Raw materials or subcomponents required in the manufacturing process are generally available from several sources.
Giovanni Barbarossa joined the Company in 2012 and has been the Chief Strategy Officer of the Company and the President of the Materials Segment since July 2019. Previously, he was the Chief Technology Officer of the Company and the President of the Laser Solutions Segment. Dr.
Giovanni Barbarossa joined Coherent Corp. in 2012 and has been the Chief Strategy Officer of the Company since 2019. From 2019 to 2025, he was also President of the Materials Segment. From 2012 to 2019, Dr. Barbarossa was the Chief Technology Officer of the Company and President of the Laser Solutions Segment. Previously, Dr.
Item 1. BUSINESS Definitions Coherent Corp. (“Coherent,” the “Company,” “we,” “us,” or “our”), a global leader in materials, networking, and lasers, is a vertically integrated manufacturing company that develops, manufactures, and markets engineered materials, optoelectronic components and devices, and lasers for use in the industrial, communications, electronics, and instrumentation markets.
Item 1. BUSINESS Definitions Coherent Corp. (“Coherent,” the “Company,” “we,” “us,” or “our”), is a vertically integrated manufacturing company that develops, manufactures, and markets lasers, transceivers, and other optical and optoelectronic devices, modules, and systems, as well as engineered materials, for use in the communications, industrial, instrumentation and electronics markets.
We have experienced employees on-site at each of our manufacturing locations who are tasked with environmental, health, and safety education and compliance. We customize our policies to the local requirements and circumstances of each plant. • Talent Acquisition, Development, and Training .
We have experienced employees on-site at each of our manufacturing locations who are tasked with environmental, health, and safety education and compliance. We customize our policies to the local requirements and circumstances of each plant. Talent Acquisition, Employee Development, and Learning . Hiring talented individuals and continuing to develop our employees are critical to our operations.
Effective July 1, 2022, the Company reports financial information for these three segments. Financial data regarding our revenues, results of operations, reporting segments, and international sales for the three years ended June 30, 2024, are set forth in the Consolidated Statements of Earnings (Loss) and in Note 14.
Financial data regarding our revenues, results of operations, reporting segments, and international sales for the three years ended June 30, 2025, are set forth in the Consolidated Statements of Earnings (Loss) and in Note 14.
Our VCSEL products leverage our world-class 6-inch GaAs platform, combining our epitaxial wafer growth and wafer fabrication capabilities. Our VCSELs have been used in consumer products such as computer mice and mobile phones for many years. Our VCSELs are also widely deployed in datacenters and HDMI optical cables as well as in vehicle steering wheels.
Our VCSEL products leverage our world-class 6-inch GaAs platform, combining our epitaxial wafer growth and wafer fabrication capabilities. Our VCSELs are also widely deployed in datacenters and HDMI optical cables as well as in vehicle steering wheels.
Segment and Geographic Reporting to our Consolidated Financial Statements, which are included in Item 8 of this Annual Report on Form 10-K, and are incorporated herein by reference. We also discuss certain Risk Factors set forth in Item 1A – Risk Factors of this Annual Report on Form 10-K related to our foreign operations, which are incorporated herein by reference.
Segment and Geographic Reporting to our Consolidated Financial Statements, which are included in Item 8 of this Annual Report on Form 10-K, and are incorporated herein by reference.
Our Total Rewards offerings are designed to: ◦ Provide a market-competitive total rewards package that attracts, motivates, rewards, and retains top talent ◦ Align total rewards offerings with our competitors with which we compete for talent ◦ Increase transparency of rewards programs, including sharing company and/or business segment financial metrics, and measure achievements to challenging objectives ◦ Balance fixed costs (benefits and base pay) and variable costs (bonus and equity) ◦ Provide pay for performance, linked to company and individual performance ◦ Ensure strong governance practices, and ◦ Align with the interests of our shareholders Eligible employees may participate in the Employee Stock Purchase Plan (ESPP), providing the opportunity to share in the potential growth of our company stock and allowing employees to purchase company shares at a discount.
Our Total Rewards offerings are designed to: • Provide a market-competitive total rewards package that attracts, motivates, rewards, and retains top talent • Balance fixed costs (benefits and base pay) and variable costs (bonus and equity) • Provide pay for performance, linked to company and individual performance • Ensure strong governance practices, and • Align with the interests of our shareholders Eligible employees may participate in the Employee Stock Purchase Plan, allowing them to purchase company shares at a discount.
Eng received her PhD and M.S. in electrical Engineering from Stanford, and an M.S. and B.A. from Bryn Mawr College (summa cum laude) and a B.S., with honors from the California Institute of Technology (Caltech). In 2022, Dr.
Eng holds a B.A. degree summa cum laude in physics from Bryn Mawr College and a B.S. degree in electrical engineering with honors from the California Institute of Technology (Caltech).
Our proven experience in both transmission and transport allows us to effectively address the emerging DCI market. Our transceivers, submodules, pluggable amplifiers, and configurable line cards are able to meet the requirements of low power consumption, compactness, ease of installation and operation, and cost savings, which are often mandatory features in the DCI market. • Datacom Market Vertical .
Our optoelectronic components, transceivers, submodules, pluggable amplifiers, and configurable line cards are able to meet the requirements of low power consumption, compactness, ease of installation and operation, and cost savings, which are often mandatory features in the DCI market. Industrial Market Group • Precision Manufacturing Market Vertical.
Sales and Marketing We market our products and service through a direct sales force and through representatives and distributors around the world. Our market strategy is focused on understanding our customers’ requirements and building market awareness and acceptance of our products and service. New products are continually being developed and introduced to our new and established customers in all markets.
Our market strategy is focused on understanding our customers’ requirements and building market awareness and acceptance of our products and services. New products are continually being developed and introduced to our new and established customers in all markets. We have centralized our worldwide sales and strategic marketing functions.
The following defined terms are used in this Annual Report on Form 10-K: artificial intelligence (AI); bismuth telluride (Bi 2 Te 3 ); cadmium telluride (CdTe); carbon dioxide (CO 2 ); chemical vapor deposition (CVD) of materials including diamond; continuous wave (CW); datacenter interconnect (DCI); dense wavelength division multiplexing (DWDM); diversity, equity, and inclusion (DEI); edge-emitting lasers (EELs); environmental, social, and governance (ESG); extreme-ultraviolet (EUV) lithography; fifth-generation (5G) wireless; fourth-generation (4G) wireless; gallium arsenide (GaAs); gallium antimonide (GaSb), gallium nitride (GaN); Geostationary Operational Environment Satellite Program (GOES); gigabit per second (Gbps); high-definition multimedia interface (HDMI); high-electron-mobility transistor (HEMT); indium phosphide (InP); infrared (IR); integrated circuit (IC); intellectual property (IP); kilowatt (kW); light detection and ranging (LiDAR); liquid crystal (LC); liquid crystal on silicon (LCoS); machine learning (ML); metal-oxide-semiconductor field-effect transistor (MOSFET); millimeters (mm); nanometers (nm); near-infrared (NIR); optical channel monitor (OCM); optoelectronic chip hybrid integration platform (OCHIP); original equipment manufacturer (OEM); optical time-domain reflectometer (OTDR); radio frequency (RF); reconfigurable optical add/drop multiplexer (ROADM); research and development (R&D); silicon carbide (SiC); terabit per second (Tbps); three-dimensional (3D); ultraviolet (UV); vertical-cavity surface-emitting laser (VCSEL); virtual reality (VR); wavelength selective switching (WSS); zinc selenide (ZnSe); and zinc sulfide (ZnS).
The following defined terms are used in this Annual Report on Form 10-K: artificial intelligence (AI); artificial reality (AR); bismuth telluride (Bi 2 Te 3 ); carbon dioxide (CO 2 ); chemical vapor deposition (CVD); continuous wave (CW); co-packaged optics (CPO); datacenter interconnect (DCI); directly modulated laser (DML); deep ultraviolet (DUV); digital signal processor (DSP); edge-emitting laser (EEL); electron-absorption modulated laser (EML); environmental, social, and governance (ESG); extreme-ultraviolet (EUV) lithography; fifth-generation (5G) wireless; fourth-generation (4G) wireless; gallium arsenide (GaAs); gallium antimonide (GaSb), gallium nitride (GaN); gigabit per second (G); high-definition multimedia interface (HDMI); high-electron-mobility transistor (HEMT); indium phosphide (InP); infrared (IR); integrated circuit (IC); intellectual property (IP); kilowatt (kW); light detection and ranging (LiDAR); light-emitting diode (LED); liquid crystal (LC); liquid crystal on silicon (LCoS); machine learning (ML); metal-oxide-semiconductor field-effect transistor (MOSFET); millimeter (mm); nanometer (nm); near-infrared (NIR); optically pumped semiconductor laser (OPSL); organic light-emitting diode (OLED); original equipment manufacturer (OEM); polymerase chain reaction (PCR); printed circuit board (PCB); radio frequency (RF); reconfigurable optical add/drop multiplexer (ROADM); research and development (R&D); silicon carbide (SiC); terabit per second (T); three-dimensional (3D); two-dimensional (2D); transimpedance amplifier (TIA); ultraviolet (UV); vertical-cavity surface-emitting laser (VCSEL); virtual reality (VR); watt (W); wavelength selective switching (WSS); zinc selenide (ZnSe); and zinc sulfide (ZnS).
Coherent laser optics and solutions for the industrial market remain well-positioned: our portfolio enables a wide variety of applications including EV battery welding, fine processing of medical devices, additive manufacturing, high-temperature superconducting wires and tapes, and even bleaching of jeans.
Our portfolio of optics, components, lasers, and systems enables a wide variety of applications including EV battery welding, fine processing of medical devices, additive manufacturing, high-temperature superconducting wires and tapes, and even bleaching of jeans. 9 • Semiconductor Capital Equipment Market Vertical.
These substrates are utilized by customers worldwide to manufacture GaN-on-SiC HEMT RF power amplifier devices that are embedded in remote radio heads in 4G and 5G wireless base stations.
These substrates are utilized by 10 customers worldwide to manufacture GaN-on-SiC HEMT RF power amplifier devices that are embedded in remote radio heads in 4G and 5G wireless base stations. Sales and Marketing We market our products and services through a direct sales force and through representatives and distributors around the world.
Select employees are eligible to receive equity-based awards, to align employee and shareholder interests. In addition to offering competitive and fair compensation, we also offer a compelling suite of benefits, including comprehensive health benefits, competitive time off programs, and employee assistance programs. • Diversity and Inclusion .
Select employees are eligible to receive equity-based awards, to align employee and shareholder interests. We also offer a compelling suite of benefits, including comprehensive health benefits, competitive time-off programs, and employee assistance programs. 7 Inclusion and Belonging . Coherent respects and upholds the universal values of human rights, which are fundamental to every individual.
Our U.S. production and R&D operations are located in California, Colorado, Connecticut, Delaware, Florida, Illinois, Massachusetts, Michigan, Mississippi, New Jersey, New York, Ohio, Oregon, Pennsylvania, and Texas, and our non-U.S. production and R&D operations are based in Australia, China, Finland, Germany, India, Malaysia, the Philippines, Singapore, South Korea, Spain, Sweden, Switzerland, Thailand, the United Kingdom, and Vietnam.
Our principal U.S. production and R&D operations, in alphabetical order, are located in California, Connecticut, Delaware, New Jersey, Pennsylvania, and Texas. Our principal non-U.S. production and R&D operations, in alphabetical order, are based in China, Finland, Germany, Malaysia, the Philippines, Singapore, South Korea, Sweden, Switzerland, the United Kingdom, and Vietnam. We also utilize contract manufacturers and strategic suppliers.
We believe that our vertical integration, manufacturing facilities and equipment, experienced technical and manufacturing employees, and worldwide marketing and distribution channels provide us with competitive advantages.
We also compete by using our intellectual property, ability to scale, product quality, on-time delivery, and technical support. We believe that our vertical integration, manufacturing facilities and equipment, experienced technical and manufacturing employees, and worldwide marketing and distribution channels provide us with competitive advantages.
Coherent’s Aerospace & Defense division maintains separate business development, IT infrastructure, accounting, finance, engineering, and manufacturing facilities in the United States with strictly controlled access; they are dedicated to our U.S. government-supported contracts. • Semiconductor Capital Equipment Market Vertical.
Our Aerospace & Defense division maintains separate business development, IT infrastructure, accounting, finance, engineering, and manufacturing facilities in the United States with strictly controlled access; the division is dedicated to our U.S. government-supported contracts. Instrumentation Market Group • Life Sciences Market Vertical. Within the life sciences end market, we focus on instrumentation that integrates light- and/or thermal-management solutions.
We continue to develop strategic second sources as part of our overall business continuity planning, and occasionally experience problems associated with raw materials not meeting contract specifications for quality or purity. Risks associated with reliance on third parties for the timely and reliable delivery of raw materials are discussed in greater detail in Item 1A.
Additional research and capital investment are sometimes needed to better define future raw materials specifications. We continue to develop strategic second sources as part of our overall business continuity planning, and occasionally experience problems associated with raw materials not meeting contract specifications for quality or purity.
Therefore, 3D sensing applications created the need to scale up manufacturing to 6-inch wafer processing. Today, Coherent is one of the very few vertically integrated 6-inch VCSEL manufacturers with a proven track record in high-volume manufacturing of high-reliability, large multi-emitter VCSEL arrays designed for 3D sensing.
Today, Coherent is one of the very few vertically integrated 6-inch VCSEL manufacturers with a proven track record in high-volume manufacturing of high-reliability, large multi-emitter VCSEL arrays designed for 3D sensing. We are also one of the very few companies that have shipped InP diode lasers and photodiodes in high volume for consumer electronics applications; these are also manufactured in-house.
These transceivers are protocol-agnostic, meaning the same transceiver hardware can support Ethernet and InfiniBand, as well as proprietary protocols for AI and ML such as NVIDIA’s NVLink. 14 Over the years, we have made strategic investments that give us a unique level of vertical integration.
At Coherent, we have a complete portfolio of transceivers matched to the requirements set by AI and ML. These transceivers are protocol-agnostic, meaning the same transceiver hardware can support Ethernet and InfiniBand, as well as proprietary protocols for AI and ML such as NVIDIA’s NVLink.
We provide all employees the chance to learn and develop critical skills, and we strive to attract, motivate, and retain our talent. Our Leadership Academy offers global development programs for our people leaders to enhance their capabilities.
We provide all employees the chance to learn and develop critical skills, and we strive to attract, motivate, and retain our talent. Total Rewards.
Bashaw II 58 President Richard Martucci 56 Interim Chief Financial Officer and Treasurer Christopher Koeppen 52 Chief Innovation Officer Julie Sheridan Eng 56 Chief Technology Officer Ronald Basso 63 Chief Legal and Compliance Officer & Secretary Ilaria Mocciaro 53 Chief Accounting Officer Jim Anderson was appointed Chief Executive Officer of Coherent Corp. and a member of the Board of Directors on June 3, 2024.
Name Age Position Jim Anderson 52 Chief Executive Officer Giovanni Barbarossa 62 Chief Strategy Officer Sherri Luther 60 Chief Financial Officer and Treasurer Christopher Koeppen 53 Chief Innovation Officer Julie Sheridan Eng 58 Chief Technology Officer Rob Beard 47 Chief Legal and Global Affairs Officer & Secretary Ilaria Mocciaro 54 Chief Accounting Officer 13 Jim Anderson was appointed Chief Executive Officer (“CEO”) of Coherent Corp. and a member of the Board of Directors on June 3, 2024.
Continuing to increase the use of renewable electricity is an important lever to achieve that commitment. Additional information on the Company’s sustainability performance can be found on the ESG section of our website at www.coherent.com. The website address is intended to be an inactive textual reference only.
Coherent has set as a top priority to reduce its carbon footprint across its global operations. Additional information on the Company’s sustainability performance can be found on the ESG section of our website at www.coherent.com. The website address is intended to be an inactive textual reference only.
For display manufacturing, we offer a broad portfolio of laser sources and optical systems that will meet the requirements of display customers now, next, and beyond. Communications Market Group • Telecom Market Vertical. Coherent’s optical communications products and technologies enable next-generation high-speed optical transmission systems, networks, and datacenter solutions necessary to meet the accelerating global bandwidth demand.
Our portfolio also includes silicon photonics and a broad array of CPO-enabling technologies. • Telecom Market Vertical. Coherent optical communications products and technologies enable next-generation high-speed optical transmission systems and transport networks, and datacenter solutions necessary to meet the accelerating global bandwidth demand.
Competition Coherent is a global leader in many of its product families. We compete, in part, on our core competencies from materials to systems, our differentiated products and service, and the sustainability of our competitive advantages. We also compete by leveraging our intellectual property, ability to scale, product quality, on-time delivery, and technical support.
We had two customers who each contributed more than 10% of revenue during fiscal 2025. Competition Coherent is a global leader in many of its product families. We compete, in part, on our core competencies from materials to systems, our differentiated products and services, and the sustainability of our competitive advantages.
Coherent respects and upholds the universal values of human rights, which are fundamental to every individual. We hold an expectation for all leaders and employees to engage with one another in a manner that is dignified, fair, and respectful.
We hold an expectation for all leaders and employees to engage with one another in a manner that is dignified, fair, and respectful, and we continue to identify ways to highlight different perspectives.
They serve as a model for how we grow the Company in an ethical, scalable, and sustainable manner. • Our People . Our workplace is defined by our people. It enables everyone to come to work authentically as their “best selves.” This includes supporting an inclusive environment in which every individual is considered a valuable member of the team.
They serve as a model for how we grow the Company in an ethical, scalable, and sustainable manner. Our People . We support an inclusive environment in which every individual is considered a valuable member of the team. We listen to the voice of the employee and foster open communication through an open-door policy and engagement surveys, among other methods.
Hiring talented individuals and continuing to develop them are critical to our operations, and we are focused on creating experiences and programs that foster growth and performance. Our Talent Acquisition teams continue their outreach efforts to engage and attract diverse, high-quality talent to our organization. We have a robust succession-planning process that identifies internal candidates for development.
Our Talent Acquisition teams continue their outreach efforts to engage and attract diverse, high-quality talent to our organization. In connection with universities, we are focused on an internship and apprentice program that builds our early career hire talent pool. We have a robust succession-planning process that identifies internal candidates for development to build a talent funnel for our leadership pipelines.
We generate almost all of our revenues, earnings, and cash flows from developing, manufacturing, and marketing a broad portfolio of products and services for our end markets. We also generate revenues, earnings, and cash flows from externally funded R&D contracts relating to the development and manufacture of new technologies, materials, and products.
We generate nearly all of our revenues, earnings, and cash flows from developing, manufacturing, and marketing a wide range of products and services for our end markets.
This laser technology will enable 1.6T transceivers with up to 10 km reach. Electronics Market Group • Consumer Electronics Market Vertical. We manufacture GaAs VCSELs and VCSEL arrays, InP edge-emitting lasers and photo diodes, as well as specialty glass wafers for the consumer electronics market.
These systems are sold to universities and research institutions across the globe for applications such as neuroscience and optogenetics. Electronics Market Group • Consumer Electronics Market Vertical. We manufacture GaAs VCSELs and VCSEL arrays, InP edge-emitting lasers and photo diodes, as well as specialty glass wafers for the consumer electronics market.
In addition to VCSELs, our products for the consumer electronics market include wafer-scale optics, diffraction gratings, thermoelectric coolers, driver ICs, and substrates for sensing and AR/VR applications. 15 • Automotive Market Vertical. We are a global leader in SiC substrates for power electronics that improve the energy efficiency of electric and hybrid-electric vehicles.
An increasing number of consumer devices are coming on the market with embedded VCSELs, including multiple smartphones and tablets, AR/VR headsets, smart watches, and household robots. In addition to VCSELs, our products for the consumer electronics market include wafer-scale optics, diffraction gratings, thermoelectric coolers, driver ICs, and substrates for sensing and AR/VR applications. • Automotive Market Vertical.
He then served as Vice President of the Industrial Laser Group and Corporate Strategic Technology Planning from 2017 until his appointment as Chief Technology Officer in 2019. In October, 2022, Dr. Koeppen was appointed Chief Innovation Officer of the Company. Previously, Dr. Koeppen was co-founder and CEO of CardinalPoint Optics, prior to its acquisition by Aegis Lightwave.
He was named General Manager of the Company’s Agile Network Products Division in 2012 and Director of Corporate Strategic Technology Planning in 2015. Dr. Koeppen then served as Vice President of the Industrial Laser Group and Corporate Strategic Technology Planning from 2017 until his appointment as Chief Technology Officer in 2019.
Research and Development During the fiscal year ended June 30, 2024, we continued to identify, invest in, and focus our R&D on new products and platform technologies in an effort to accelerate our organic growth. This approach is managed under a disciplined innovation program that we refer to as the Coherent Phase Gate Process.
Research and Development During the fiscal year ended June 30, 2025, we continued to identify, invest in, and focus our R&D on new products and platform technologies for the long term growth of the Company.
Ilaria Mocciaro joined Coherent Corp. in February 2023 as the Senior Vice President, Chief Accounting Officer, and Corporate Controller. Ms. Mocciaro joined Coherent from CDW, where she was the Vice President, Chief Accounting Officer, and Controller from 2020 to 2022.
She has held senior leadership roles at multiple Fortune 500 companies, overseeing global finance functions including accounting, tax, treasury, SEC reporting, and financial systems. Ms. Mocciaro is currently the Chief Accounting Officer and Corporate Controller for Coherent Corp. She joined Coherent in 2023 from CDW, where she was Vice President, Chief Accounting Officer, and Controller from 2020 to 2022.
Import and Export Compliance We are required to comply with all relevant import/export and economic sanctions laws and regulations, including: • The import regulations administered by U.S. Customs and Border Protection; • The International Traffic in Arms Regulations administered by the U.S.
Customs and Border Protection; • The International Traffic in Arms Regulations (ITAR) administered by the U.S.
We listen to the voice of the employee and foster open communication through focus groups, personal interviews, an open-door policy, and engagement surveys, among other methods. This rich feedback allows us to reflect and adjust our internal initiatives across the globe to create a culture that recognizes employees’ contributions and values their opinions.
This rich feedback allows us to reflect and adjust our internal initiatives across the globe to create a culture that recognizes employees’ contributions and values their opinions. As of June 30, 2025, the Company employed approximately 30,000 employees worldwide.
We rely on our own production and design capability to manufacture and specify certain strategic components, crystals, fibers, semiconductor lasers, and laser-based systems. The continued high quality of and access to these raw materials are critical to the stability and predictability of our manufacturing yields.
We rely on our own production and design capability to manufacture and specify certain strategic components, crystals, fibers, semiconductor lasers, and laser-based systems. We use rare-earth materials in some of our production processes. Like with other materials, we are constantly working to strengthen and diversify our supply chain for resilience.
We not only design and manufacture our transceivers internally, but we also design and manufacture many of the components, including lasers, detectors, ICs, and passive optics. When designing a new transceiver that requires a new component, we either source that component from one of our valued development partners, or we design and manufacture it internally.
Over the years, we have made strategic investments that give us a unique level of vertical integration. We not only design and manufacture our transceivers internally, but we also design and manufacture many of the materials and components, including lasers, detectors, ICs, and passive optics.
As of June 30, 2024, we employed approximately 624 individuals in sales, marketing, and support. We do business with a number of customers in the aerospace & defense industry, who in turn generally contract with a governmental entity, typically a U.S. government agency. We had one customer who contributed more than 10% of revenue during fiscal 2024.
Our sales force includes a highly trained technical sales support team to assist customers in designing, testing, and qualifying our products as key components of our customers’ systems. We do business with a number of customers in the aerospace and defense industry, who in turn generally contract with a governmental entity, typically a U.S. government agency.
Products are actively marketed through key account relationships, personal selling, select advertising, attendance at trade shows, digital marketing, and customer partnerships. Our sales force includes a highly trained technical sales support team to assist customers in designing, testing, and qualifying our products as key components of our customers’ systems.
Sales offices have been aligned to best serve and distribute products to our worldwide customer base. Our sales force develops effective communications with our OEM and end-user customers worldwide. Products are actively marketed through key account relationships, personal selling, select advertising, attendance at trade shows, digital marketing, and customer partnerships.
Eng joined the Company in 2019 with the acquisition of Finisar Corporation, where she held various senior management positions, including Executive Vice President and General Manager of 3D Sensing, and Executive Vice President of Datacom Engineering. Dr. Eng spent over 20 years in the optoelectronics and optical communications industries, including roles at AT&T, Lucent, and Agere. Dr.
Eng held various senior management positions at Finisar Corporation, including Executive Vice President and General Manager of 3D Sensing, and Executive Vice President of Datacom Engineering. Over the 15 years that she managed datacom transceiver engineering, her teams production-released hundreds of fiber-optic transceiver products and achieved numerous industry firsts. Dr.
Medical applications comprise instrumentation that is used in the direct treatment of patients and includes medical lasers, imaging, point-of-care wearables, and thermal-based treatment solutions. Medical laser and clinical procedures are increasingly performed with systems that integrate our lasers, optics, and thermal solutions.
Our broad product portfolio delivers solutions covering illumination, light management, thermal management, sample loading, and detection. Visible-wavelength lasers and multicolored laser and LED engines provide low-noise, high-performance, reliable light sources. Medical applications comprise instrumentation that is used in the direct treatment of patients and includes medical lasers, imaging, point-of-care wearables, and thermal-based treatment solutions.
Our lasers are displacing conventional technologies because they can do the job faster, yield higher quality, provide overall economic benefits, and enable next-generation applications. Our network of worldwide manufacturing sites allows us to manufacture our products in regions that provide cost-effective and risk-management advantages. We employ numerous advanced manufacturing technologies and systems at our manufacturing facilities.
Our lasers are displacing conventional technologies because they can do the job faster, yield higher quality, provide overall economic benefits, and enable next-generation applications. Overall, our key differentiators are our deep technology expertise combined with our ability to deliver volume solutions at scale.
Risk Factors of this Annual Report on Form 10-K. Reporting Segments and Business Units The Company reports its results in three reporting segments: (i) Networking, (ii) Materials, and (iii) Lasers. The Networking segment leverages Coherent’s compound semiconductor technology platforms and deep knowledge of end-user applications for its key end markets to deliver differentiated components and subsystems.
Risks associated with reliance on third parties for the timely and reliable delivery of raw materials are discussed in greater detail in Item 1A. Risk Factors of this Annual Report on Form 10-K. Reporting Segments and Business Units For fiscal year 2025, the Company reports its results in three reporting segments: (i) Networking, (ii) Materials, and (iii) Lasers.
Our front-end laser products encompass solid-state lasers and excimer lasers designed for semiconductor inspection tasks along with CO 2 lasers tailored for wafer annealing, supporting the most advanced processing nodes. We also offer a suite of lasers for a variety of advanced packaging (back-end) applications, ranging from cutting, PCB and substrate drilling, and optical debonding to numerous laser marking tasks.
We also offer a suite of lasers for a variety of advanced packaging applications, ranging from cutting, PCB and substrate drilling, and optical debonding to numerous laser marking tasks. • Display Capital Equipment Market Vertical. Our excimer laser-based annealing systems can improve precision, combining high-spatial precision and selectivity for LTPS OLED display production.
We also utilize contract manufacturers and strategic suppliers. In addition to sales offices co-located at most of our manufacturing sites, we have sales and marketing subsidiaries in Belgium, Canada, China, France, Germany, Israel, Italy, Japan, the Netherlands, South Korea, Spain, Switzerland, Taiwan, and the United Kingdom.
In addition to sales offices co-located at many of our manufacturing sites, we have sales and marketing subsidiaries, in alphabetical order, in Belgium, Canada, France, Israel, Italy, Japan, the Netherlands, and Taiwan. We believe our diverse manufacturing base sets us apart, especially at a time when supply chain resiliency is strongly valued by our customers.
Our industry-leading semiconductor lasers, optics, and materials can be leveraged for LiDAR systems embedded in advanced driver-assistance systems (ADAS) for autonomous vehicles. LiDAR sensors enable ADAS to perform functions such as emergency braking, distance warning, and adaptive cruise control.
We are a global leader in SiC substrates for power electronics that improve the energy efficiency of electric and hybrid-electric vehicles. Our industry-leading semiconductor lasers, optics, and materials can be leveraged for LiDAR systems embedded in advanced driver-assistance systems (ADAS) for autonomous vehicles.
UV ultrashort-pulsed lasers are therefore the preferred choice, 13 and here again we offer an optimized portfolio of pico- and femtosecond laser sources. Beyond OLED, we are offering UV and DUV laser solutions for a broad range of applications to manufacture next-generation microLED displays.
Our CO 2 lasers and UV ultrashort-pulsed lasers are used for cutting applications. Beyond OLED, we are offering UV and DUV laser solutions for a broad range of applications to manufacture next-generation microLED displays. • Aerospace & Defense Market Vertical. Coherent aerospace and defense solutions enable mission-critical capabilities for applications in high-energy lasers; contested space; and intelligence, surveillance, and reconnaissance.
Coherent’s semiconductor laser bars and stacks are used in applications such as hair and wrinkle removal, and femtosecond lasers combined with excimer lasers are used for common procedures like LASIK. Crystals and laser cavities, along with custom-designed lens assemblies, are used for ophthalmic, dental, and dermatological surgeries. CO 2 lasers are specifically used in hard- and soft-tissue dental procedures.
Coherent semiconductor laser bars and stacks are used in applications such as hair and wrinkle removal, and femtosecond lasers combined with excimer lasers are used for common procedures like LASIK. • Scientific Research Market Vertical . Our products include CW lasers for microscopy, advanced ultrafast-pulsed laser sources, and high-energy pulsed excimer gas lasers.
For the full fiscal year 2023, Coherent, Inc., was included in the combined company and renamed as the Lasers segment. The Lasers segment’s lasers and optics products serve industrial customers in semiconductor and display capital equipment, precision manufacturing, and aerospace & defense, as well as instrumentation customers in life sciences and scientific devices.
The Lasers segment’s lasers and optics products serve industrial customers in both semiconductor and display capital equipment and precision manufacturing, and instrumentation customers in life sciences and scientific instrumentation. Each of these segments develops and markets key products as described below. Networking • Transceivers, systems, subsystems, modules, components, optics, and semiconductor devices for datacenter and communications applications.
Information Regarding Reporting Segments and Foreign Operations In connection with the acquisition of Coherent, Inc., effective July 1, 2022, the Company realigned its organizational structure into three reporting segments for the purpose of making operational decisions and assessing financial performance: (i) Networking, previously referred to as our Photonic Solutions segment; (ii) Materials, previously referred to as our Compound Semiconductors segment; and (iii) Lasers.
Many of our products include custom integrated software that we develop internally, leveraging our deep domain expertise. Information Regarding Reporting Segments and Foreign Operations For fiscal year 2025, the Company’s organizational structure was aligned into three reporting segments for the purpose of making operational decisions and assessing financial performance: (i) Networking, (ii) Materials, and (iii) Lasers.
Christopher Koeppen joined the Company in 2011 following the acquisition of Aegis Lightwave, Inc., where he served as General Manager, Aegis-NJ. He was named General Manager of the Agile Network Products Division in 2012 and Director of Corporate Strategic Technology Planning in 2015.
She serves on the Board of Directors of Silicon Labs and is also NACD (National Association of Corporate Directors) Directorship Certified. Christopher Koeppen joined Coherent Corp. in 2011 via the acquisition of Aegis Lightwave, Inc., where he served as General Manager, Aegis-NJ.
Our metal-matrix composites and reaction-bonded ceramics enable these applications, thanks to their optimum combination of light weight, strength, hardness, and coefficient of thermal expansion. Our reaction-bonded SiC materials are used to manufacture wafer chucks, lightweight scanning stages, and high-temperature corrosion-resistant wafer support systems. Our cooled SiC mirrors and precision patterned reticles are used in the illumination systems of lithography tools.
Semiconductor capital equipment requires advanced materials to meet the need for tighter tolerances, enhanced thermal stability, faster wafer transfer speeds, and reduced stage settling times. Our metal-matrix composites and reaction-bonded ceramics enable these applications, thanks to their optimum combination of light weight, strength, hardness, and coefficient of thermal expansion.
Barbarossa was employed at Avanex Corporation from 2000 through 2009, serving in various executive positions in product development and general management, ultimately serving as the President and Chief Executive Officer. When Avanex merged with Bookham Technology, forming Oclaro, Inc., Dr. Barbarossa became a member of the Board of Directors of Oclaro and served as such from 2009 to 2012.
Barbarossa was the President and Chief Executive Officer of Avanex Corporation until its merger with Bookham plc. into Oclaro, Inc., of which he was a member of the Board of Directors from 2009 to 2012. Before joining Avanex pre-IPO, Dr. Barbarossa had management responsibilities at British Telecom Labs, AT&T Bell Labs, Lucent Technologies, and Hewlett-Packard. Dr.
General Description of Business We develop, manufacture, and market engineered materials, optoelectronic components and devices, and optical and laser systems and subsystems for use in the industrial, communications, electronics, and instrumentation markets. We use advanced engineered materials growth technologies and proprietary high-precision fabrication, microassembly, optical thin-film coating, and electronic integration to manufacture complex optoelectronic devices and modules.
General Description of Business Coherent develops, manufactures, and markets lasers, transceivers, and other optical and optoelectronic devices, modules, and systems, as well as engineered materials, for use in communications, industrial, instrumentation and electronics applications.
Previously, he had management responsibilities at British Telecom, AT&T Bell Labs, Lucent Technologies, and Hewlett Packard. Dr. Barbarossa graduated from the University of Bari, Italy, with a B.S. in Electrical Engineering, and has a Ph.D. in Photonics from the University of Glasgow, U.K. Walter R.
Barbarossa holds 118 U.S. patents and has published over 100 papers. He graduated cum laude from the University of Bari, Italy, with a B.S. in electrical engineering, and has a Ph.D. in photonics from the University of Glasgow, U.K. Sherri Luther was named Chief Financial Officer (“CFO”) of Coherent Corp. in September 2024. Ms.
He previously served as a director and as President and Chief Executive Officer of Lattice Semiconductor Corporation since September 2018. Prior to joining Lattice, Mr. Anderson served as the Senior Vice President and General Manager of the Computing and Graphics Business Group at Advanced Micro Devices, Inc. (AMD). Prior to AMD, Mr.
He brings over 25 years of experience in the technology and semiconductor industries, with a strong track record in innovation-driven businesses. Prior to joining Coherent, Mr. Anderson served as President and Chief Executive Officer of Lattice Semiconductor Corporation from September 2018 to 2024.
We specify and test these raw materials at the onset of and throughout the production process. Additional research and capital investment are sometimes needed to better define future raw materials specifications.
These strategies include maintaining additional buffer stocks and securing multiple sources to ensure resilience. The continued high quality of and access to these raw materials are critical to the stability and predictability of our manufacturing yields. We specify and test these raw materials at the onset of and throughout the production process.
The Materials segment is a market leader in engineered materials and optoelectronic devices, such as those based on ZnSe, ZnS, GaAs, InP, GaSb, and SiC. The Lasers segment’s lasers and optics products serve industrial customers in semiconductor and display capital equipment, precision manufacturing, and aerospace & defense, as well as instrumentation customers in life sciences and scientific instrumentation.
The Networking segment leverages our compound semiconductor technology platforms and deep knowledge of end-user applications for its key end markets to deliver differentiated components, modules, and subsystems. The Materials segment is a market leader in engineered materials and optoelectronic devices, such as those based on ZnSe, ZnS, GaAs, InP, GaSb, and SiC.
He previously served on the Board of Directors of Sierra Wireless from April 2020 to January 2023. Mr.
Anderson currently serves on the Board of Directors of Applied Materials, Inc., where he was appointed in July 2025. He previously served on the Board of Directors of Entegris, Inc., (March 2023–July 2024), the Semiconductor Industry Association (until June 2024), and Sierra Wireless (April 2020–January 2023).
GaN-on-SiC RF power amplifiers have superior performance, compared with devices based on silicon, over a wide spectrum of 5G operating frequencies in the gigahertz range, including in the millimeter-wave bands. We are a market leader in the technology development and large-volume manufacturing of 100 mm, 150 mm, and the industry’s first 200 mm semi-insulating SiC substrates.
LiDAR sensors enable ADAS to perform functions such as emergency braking, distance warning, and adaptive cruise control. • Wireless Market Vertical. We are a market leader in the technology development and large-volume manufacturing of 100 mm, 150 mm, and the industry’s first 200 mm semi-insulating SiC substrates.
Coherent has multiple InP fabs in the U.S. and Europe; two of them are moving to 6-inch wafer capability. For Level 1 link distances greater than 100 m, transceivers based on silicon photonics may be used. All silicon photonics products, including some of our own, need an InP CW laser to generate the light.
We have in-house laser design and manufacturing capability for GaAs-based VCSELs, InP-based DMLs, EMLs, and CW lasers. Coherent has multiple 6-inch GaAs VCSEL fabs in the U.S. and Europe. We also have multiple InP fabs in the U.S. and Europe, and we are moving to 6-inch wafer capability.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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We are subject to the passage of and changes in the interpretation of regulation by U.S. government entities at the federal, state, and local levels and by non-U.S. agencies, including, but not limited to, the following: • We are required to comply with import laws and export control and economic sanctions laws, which may affect our ability to enter into or complete transactions with certain customers, business partners, and other persons.
We are subject to the passage of and changes in the interpretation of regulation by U.S. and other government entities at the federal, state, and local levels and by non-U.S. agencies, including, but not limited to, the following: • We are required to comply with import laws and export control and economic sanctions laws, which may affect our ability to enter into or complete transactions with certain customers, business partners, and other persons.
Moreover, under the terms of the Investment Agreement, following the closing of the initial investment and for so long as BCPE beneficially owns shares of Series B Preferred Stock (or shares of our common stock issued upon the conversion thereof) that represent, in the aggregate and on an as-converted basis, at least 25% of the number of shares of Series B Preferred Stock that it held immediately following the completion of the issuance and sale of the Series B-2 Preferred Stock upon completion of our acquisition of Coherent, BCPE will have the right to nominate one designee and to designate one observer to the our Board of Directors.
Moreover, under the terms of the Investment Agreement, following the closing of the initial investment and for so long as BCPE beneficially owns shares of Series B Preferred Stock (or shares of our common stock issued upon the conversion thereof) that represent, in the aggregate and on an as-converted basis, at least 25% of the number of shares of Series B Preferred Stock that it held immediately following the completion of the issuance and sale of the Series B-2 Preferred Stock upon completion of our acquisition of Coherent, Inc., BCPE will have the right to nominate one designee and to designate one observer to the our Board of Directors.
While we continue to invest in the cybersecurity and resiliency of our networks and to enhance our 33 internal controls and processes designed to help protect our systems and infrastructure, and the information they contain, given the complex, ongoing, and evolving nature of cyber and other security threats, these efforts may not be fully effective, particularly against previously unknown vulnerabilities and third party risks that go undetected for an extended period of time.
While we continue to invest in the cybersecurity and resiliency of our networks and to enhance our internal controls and processes designed to help protect our systems and infrastructure, and the information they contain, given the complex, ongoing, and evolving nature of cyber and other security threats, these efforts may not be fully effective, particularly against previously unknown vulnerabilities and third party risks that go undetected for an extended period of time.
Furthermore, large customers have increased buying power and ability to negotiate onerous terms into our contracts with them, including pricing, warranties, indemnification and production capability terms. If we are unable to satisfy the terms of these contracts, it could result in liabilities of a material nature, including litigation, damages, additional costs, loss of market share, and loss of reputation.
Furthermore, large customers have increased buying power and ability to negotiate onerous terms into our contracts with them, including pricing, warranties, indemnification and production capability terms. If we are unable to satisfy the terms of these contracts, it could result in liabilities of a material nature, including litigation, damages, additional costs, loss of market share, 17 and loss of reputation.
While the Restructuring Plan and other proactive cost reduction measures that we plan to take are intended to realign our cost structure as part of a transformation to a simpler, more streamlined, resilient and sustainable business model, we may encounter challenges in the execution of these efforts that could prevent us from recognizing the intended benefits of such efforts.
While the Restructuring Plans and other proactive cost reduction measures that we plan to take are intended to realign our cost structure as part of a transformation to a simpler, more streamlined, resilient and sustainable business model, we may encounter challenges in the execution of these efforts that could prevent us from recognizing the intended benefits of such efforts.
We may be subject to adverse regulatory consequences, including government oversight of facilities and export transactions, monetary penalties, and other sanctions for violations of these laws. In certain instances, these regulations may prohibit us from developing or manufacturing certain of our products for specific applications outside the United States.
We may be subject to adverse regulatory consequences, including government oversight of facilities and export transactions, monetary penalties, and other sanctions for any violations of these laws. In certain instances, these regulations may prohibit us from developing or manufacturing certain of our products for specific applications outside the United States.
In some cases our customers, vendors and other service providers may rely on the same third-party technology as we do, which means that outages, errors and other incidents impacting third parties and third party technology can impact both us, as well as our customers, vendors and service providers, which can have a compounding effect.
In some cases, our customers, vendors and other service providers may rely on the same 20 third-party technology as we do, which means that outages, errors and other incidents impacting third parties and third party technology can impact both us, as well as our customers, vendors and service providers, which can have a compounding effect.
Holders of Series B Preferred Stock are entitled to act separately in their own respective interests with respect to their ownership interests in us and have the ability to substantially influence all matters that require approval by our shareholders, including the approval of significant corporate transactions.
Holders of Series B Preferred Stock are entitled to act separately in their own respective interests with respect to their ownership interests in us and have the 29 ability to substantially influence all matters that require approval by our shareholders, including the approval of significant corporate transactions.
Identifying alternative sources of supply for certain components could be difficult and costly, result in management distraction in assisting our current and future suppliers to meet our and our customers’ technical requirements, and cause delays in shipments of our products while we identify, evaluate and test the products of alternative suppliers.
Identifying alternative sources of supply for certain components could be 18 difficult and costly, result in management distraction in assisting our current and future suppliers to meet our and our customers’ technical requirements, and cause delays in shipments of our products while we identify, evaluate and test the products of alternative suppliers.
If we fail to meet the challenges involved in successfully integrating any acquired operations or to otherwise realize any of the anticipated benefits of an acquisition, including any expected cost savings and synergies, our operations could be impaired.
If we fail to meet the challenges involved 21 in successfully integrating any acquired operations or to otherwise realize any of the anticipated benefits of an acquisition, including any expected cost savings and synergies, our operations could be impaired.
Our failure to achieve the expected results from the Restructuring Plan and other cost reduction initiatives for any reason also could lead to the implementation of additional restructuring-related activities in the future, which may exacerbate these risks or introduce new risks which could adversely affect our business, results of operations and financial condition.
Our failure to achieve the expected results from the Restructuring Plans and other cost reduction initiatives for any reason also could lead to the implementation of additional restructuring-related activities in the future, which may exacerbate these risks or introduce new risks which could adversely affect our business, results of operations and financial condition.
Failure to obtain and/or retain export licenses for these shipments could significantly reduce our revenue and materially adversely affect our business, financial condition, results of operations and relationships with our customers. Additionally, failure to comply with the various regulatory requirements could subject us to significant fines, suspension of export privileges or disbarment.
Failure to obtain and/or retain export licenses for these shipments could significantly reduce our revenue and materially adversely affect our business, financial condition, results of operations and relationships with our customers. Additionally, failure to comply with the various regulatory requirements could subject us to significant fines, suspension of export privileges or debarment.
We cannot ensure you that our expenditures for research and development will result in the launch of new products or, if such products are introduced, that those products will achieve sufficient market acceptance or to generate sales to offset the costs of development.
We cannot ensure that our expenditures for research and development will result in the launch of new products or, if such products are introduced, that those products will achieve sufficient market acceptance 16 or generate sales to offset the costs of development.
In certain circumstances, export control and economic sanctions regulations may prohibit the export of certain products, services, and technologies. We may be required to obtain an export license before exporting a controlled item, and granting of a required license cannot be assured.
In certain circumstances, export control and economic sanctions laws may prohibit the export of certain products, services, and technologies. We may be required to obtain an export license before exporting a controlled item, and granting of a required license cannot be assured.
Additionally, we have $346 million of undrawn capacity under our senior secured revolving credit facility (the “Revolving Credit Facility”). We may also incur additional indebtedness in the future by entering into new financing arrangements.
Additionally, we have $315 million of undrawn capacity under our senior secured revolving credit facility (the “Revolving Credit Facility”). We may also incur additional indebtedness in the future by entering into new financing arrangements.
In May 2023, we announced that our Board of Directors approved a restructuring plan (the “Restructuring Plan”) which includes site consolidations, facilities movements and closures, and the relocation and requalification of certain manufacturing facilities.
In May 2023, we announced that our Board of Directors approved a restructuring plan (the “2023 Plan”) which includes site consolidations, facilities movements and closures, and the relocation and requalification of certain manufacturing facilities.
Consequently, we expect to continue to consider strategic acquisition of businesses, products, or technologies complementary to our business. This may require significant investments of management time and financial resources.
Consequently, we expect to continue to consider strategic acquisitions of businesses, products, or technologies complementary to our business. This may require significant investments of management time and financial resources.
A significant failure of our internal production processes or our suppliers to deliver sufficient quantities of these necessary materials (including, in the case of rare earth minerals, as a consequence of their limited diminished availability) on a timely basis could have a material adverse effect on our business, results of operations, or financial condition.
A significant failure of our internal production processes or our suppliers to deliver sufficient quantities of these necessary materials (including, in the case of rare earth minerals, as a consequence of their limited diminished availability or as a result of export controls on such materials) on a timely basis could have a material adverse effect on our business, results of operations, or financial condition.
Some of the risks that may affect our ability to integrate or realize anticipated benefits from acquired companies, businesses, or assets include those associated with: • a significant negative financial result from the acquired company relative to our pre-acquisition expectations; • unexpected losses of key employees of the acquired company; • standardizing the combined company’s standards, processes, procedures, and controls, including integrating enterprise resource planning systems and other key business applications; • coordinating new product and process development; • increasing complexity from combining operations; • increasing the scope, geographic diversity, and complexity of our operations; • difficulties in consolidating facilities and transferring processes and know-how; • diversion of management’s attention from other business concerns; and • actions we may take in connection with acquisitions, such as: ◦ using a significant portion of our available cash; ◦ issuing equity securities, which would dilute current shareholders’ percentage ownership; ◦ incurring significant debt; ◦ incurring or assume contingent liabilities, known or unknown, including potential lawsuits, infringement actions, or similar liabilities; ◦ incurring impairment charges related to goodwill or other intangibles; and ◦ facing antitrust or other regulatory inquiries or actions.
Some of the risks that may affect our ability to integrate or realize anticipated benefits from acquired companies, businesses, or assets include those associated with: • a significant negative financial result from the acquired company relative to our pre-acquisition expectations, including potential unknown liabilities associated with the acquired company; • retaining key employees and existing customers of the acquired company; • standardizing the combined company’s standards, processes, procedures, and controls, including integrating enterprise resource planning systems and other key business applications; • coordinating new product and process development; • integrating management teams, strategies, technologies and operations, products, services, and corporate cultures; • increasing complexity from combining operations; • increasing the scope, geographic diversity, and complexity of our operations; • difficulties in consolidating facilities and transferring processes and know-how; • diversion of management’s attention from other business concerns; and • actions we may take in connection with acquisitions, such as: • using a significant portion of our available cash; • issuing equity securities, which would dilute current shareholders’ percentage ownership; • incurring significant debt; • incurring or assume contingent liabilities, known or unknown, including potential lawsuits, infringement actions, or similar liabilities; • incurring impairment charges related to goodwill or other intangibles; and • facing antitrust or other regulatory inquiries or actions.
As of June 30, 2024, we had approximately $4.1 billion of outstanding indebtedness on a consolidated basis, including under (i) our $850 million senior secured term loan A facility (the “Term A Facility”), (ii) our $2.8 billion senior secured term loan B facility (the “Term Loan B Facility”, and together with the Term A Facility, the “Senior Credit Facilities”) and (iii) our $990 million 5.000% senior notes due 2029 (the “2029 Notes”).
As of June 30, 2025, we had approximately $3.7 billion of outstanding indebtedness on a consolidated basis, including under (i) our $850 million senior secured term loan A facility (the “Term A Facility”), (ii) our $2.8 billion senior secured term loan B facility (the “Term Loan B Facility”, and together with the Term A Facility, the “Senior Credit Facilities”) and (iii) our $990 million 5.000% senior notes due 2029 (the “2029 Notes”).
We contract with a number of large end-user service providers and product companies that have considerable bargaining power, which may require us to agree to terms and conditions that could have an adverse effect on our business or ability to recognize revenues. Large end-user service providers and product companies comprise a significant portion of our customer base.
We contract with a number of large end-user service providers and product companies that have considerable bargaining power, which may require us to agree to terms and conditions that could have an adverse effect on our business or ability to recognize revenues.
Our technologies could fail to fulfill, partially or completely, our target customers’ specifications. We cannot guarantee the end market customers’ acceptance of our technologies. Further, we may be unable to fulfill the terms of our contracts with our target customers, which could result in penalties of a material nature, including damages, loss of market share, and loss of reputation.
We cannot guarantee the end market customers’ acceptance of our technologies. Further, we may be unable to fulfill the terms of our contracts with our target customers, which could result in penalties of a material nature, including damages, loss of market share, and loss of reputation.
In addition, we use rare earth minerals and produce and use high-purity and relatively uncommon materials and compounds to manufacture our products, including, but not limited to, ZnS, GaAs, yttrium aluminum garnet, yttrium lithium fluoride, calcium fluoride, germanium, selenium, telluride, Bi 2 Te 3 , and SiC.
In addition, we use rare earth minerals and produce and use high-purity and relatively uncommon materials and compounds to manufacture our products, including, but not limited to, ZnS, GaAs, yttrium aluminum garnet, yttrium lithium fluoride, calcium fluoride, germanium, selenium, telluride, Bi2Te3, and SiC.
Customers may also change a specification for a product that our suppliers cannot meet which may limit and/or otherwise impact our ability to supply such customers. 27 Some of our products, for example in the OLED display industry, require designs and specifications that are at the cutting-edge of available technologies and change frequently to meet rapidly evolving market demands.
Customers may also change a specification for a product that our suppliers cannot meet which may limit and/or otherwise impact our ability to supply such customers. Some of our products require designs and specifications that are at the cutting-edge of available technologies and change frequently to meet rapidly evolving market demands.
The Restructuring Plan may result in other unintended consequences, including higher than anticipated costs in implementing planned workforce reductions, particularly in highly regulated locations outside the United States; higher than anticipated lease termination and facility closure costs; employee attrition beyond our intended reduction in force; and decreased employee morale among our remaining employees; diversion of management attention; adverse effects to our reputation as an employer which could make it more difficult for us to hire new employees in the future; loss of the institutional knowledge and expertise of departing employees; failure to maintain adequate controls and procedures while executing, and subsequent to completing, the Restructuring Plan; and potential failure or delays to meet operational and growth targets due to the loss of qualified employees.
The Restructuring Plans may result in other unintended consequences, including higher than anticipated costs in implementing planned workforce reductions, particularly in highly regulated locations outside the United States; higher than anticipated lease termination and facility closure costs; employee attrition beyond our intended reduction in force; and decreased employee morale among our remaining employees; diversion of management attention; adverse effects to our reputation as an employer which could make it more difficult for us to hire new employees in the future; loss of the institutional knowledge and expertise of departing employees; failure to maintain adequate controls and procedures while executing, and subsequent to completing, the Restructuring Plans; and potential failure or delays to meet operational and growth targets due to the loss of qualified employees. 22 If we experience any of these adverse consequences, the Restructuring Plans and other cost reduction initiatives that we may undertake may not achieve or sustain the intended benefits.
As a result of the Restructuring Plan, we expect to incur approximately $175 million to $200 million of pre-tax charges in the fiscal years 2023 to 2025 primarily as a result of the reduction in force and facility consolidations related to the closure and relocation of sites.
As a result of the 2023 Plan, we have incurred approximately $200 million of pre-tax charges in fiscal years 2023 to 2025 primarily as a result of the reduction in force and facility consolidations related to the closure and relocation of sites.
Our declaration and payment of dividends on our capital stock in the future will be determined by our Board of Directors (or an authorized committee thereof) in its sole discretion and will depend on our financial condition, earnings, growth prospects, other uses of cash, funding requirements, applicable Pennsylvania law, and other factors our Board of Directors deems relevant. 41 The terms of the Credit Agreement contain a restriction on our ability to pay cash dividends on our capital stock.
Our declaration and payment of dividends on our capital stock in the future will be determined by our Board of Directors (or an authorized committee thereof) in its sole discretion and will depend on our financial condition, earnings, growth prospects, other uses of cash, funding requirements, applicable Pennsylvania law, and other factors our Board of Directors deems relevant.
Lack of adequate availability of high-quality ZnSe could have a material adverse effect upon our business. There can be no assurance that we will not experience manufacturing yield inefficiencies that could have a material adverse effect on our business, results of operations, or financial condition. We produce hydrogen selenide gas, which is used in our production of ZnSe.
Lack of adequate availability of high-quality ZnSe could have a material adverse effect upon our business. There can be no assurance that we will not experience manufacturing yield inefficiencies that could have a material adverse effect on our business, results of operations, or financial condition.
Our competitive position depends on our ability to develop new products and processes. To meet our strategic objectives, we must develop, manufacture, and market new products and continue to update our existing products and processes to keep pace with sudden increases in market demand and other market developments and to address increasingly sophisticated customer requirements.
To meet our strategic objectives, we must develop, manufacture, and market new products and continue to update our existing products and processes to keep pace with sudden increases and decreases in market demand and other market developments and to address increasingly sophisticated customer requirements in rapidly evolving technologies.
In addition, under Pennsylvania law, our Board of Directors may not pay dividends if after giving effect to the relevant dividend payment we (i) would not be able to pay our debts as they become due in the usual course of our business or (ii) our total assets would not be greater than or equal to the sum of our total liabilities plus the amount that would be needed if we were to be dissolved at the time as of which the dividend is measured, in order to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the dividend.
Credit facilities, indentures, or other financing agreements that we enter into in the future also may contain provisions that restrict or prohibit our ability to pay cash dividends on our capital stock. 28 In addition, under Pennsylvania law, our Board of Directors may not pay dividends if after giving effect to the relevant dividend payment we (i) would not be able to pay our debts as they become due in the usual course of our business or (ii) our total assets would not be greater than or equal to the sum of our total liabilities plus the amount that would be needed if we were to be dissolved at the time as of which the dividend is measured, in order to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the dividend.
Factors that may be considered in determining whether a change in circumstances indicating that the carrying value of our goodwill or other intangible assets may not be recoverable include declines in our stock price and market capitalization or future cash flows projections.
Goodwill and indefinite life intangible assets are required to be tested for impairment at least annually. Factors that may be considered in determining whether a change in circumstances indicating that the carrying value of our goodwill or other intangible assets may not be recoverable include declines in our stock price and market capitalization or future cash flows projections.
We also enter development projects from time to time that might result in intellectual property developed during a project that is assigned to the other party without us retaining rights to that intellectual property or is jointly owned with the other party. Our global operations are subject to complex and rapidly changing legal and regulatory requirements.
We also enter development projects from time to time that might result in intellectual property developed during a project that is assigned to the other party without us retaining rights to that intellectual property or is jointly owned with the other party.
Furthermore, if we are unable to repay the amounts due and payable under the Credit Agreement, those lenders could proceed against the collateral granted to them to secure that indebtedness, which could force us into bankruptcy or liquidation. In the event that our lenders accelerate the repayment of the borrowings, we may not have sufficient assets to repay that indebtedness.
If we are unable to repay the amounts due and payable under the Credit Agreement, those lenders could proceed against the collateral granted to them to secure that indebtedness, which could force us into bankruptcy or liquidation.
Unexpected declines in customer demands can result in excess or obsolete inventory and additional charges. Because certain of our sales, research and development, and internal manufacturing overhead expenses are relatively fixed, a reduction in customer demand likely would decrease our gross margins and operating income.
Because certain of our sales, research and development, and internal manufacturing overhead expenses are relatively fixed, a reduction in customer demand likely would decrease our gross margins and operating income.
We cannot guarantee that our investments in capital and capabilities will be sufficient. The potential end markets, as well as our ability to gain market share in such markets, may not materialize on the timeline anticipated or at all. We cannot be sure of the end market price, specification, or yield for products incorporating our technologies.
The potential end markets, as well as our ability to gain market share in such markets, may not materialize on the timeline anticipated or at all. We cannot be sure of the end market price, specification, or yield for products incorporating our technologies. Our technologies could fail to fulfill, partially or completely, our target customers’ specifications.
The occurrence of any one or more of the foregoing factors could have a material adverse effect on our business, results of operations, or financial condition. Our competitive position may require significant investments. 24 We continuously monitor the marketplace for strategic opportunities, and our business strategy includes expanding our product lines and markets through both internal product development and acquisitions.
The failure to do so could have a material adverse effect on our ability to grow our business and maintain our competitive position and on our results of operations and/or financial condition. We continuously monitor the marketplace for strategic opportunities, and our business strategy includes expanding our product lines and markets through both internal product development and acquisitions.
Under accounting principles generally accepted in the United States, we review our intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill and indefinite life intangible assets are required to be tested for impairment at least annually.
If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings. Under accounting principles generally accepted in the United States, we review our intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
If such indebtedness is accelerated, there can be no assurance that we will have sufficient financial resources or that we will be able to arrange financing to repay our borrowings at such time. 35 Unfavorable changes in tax rates, tax liabilities, or tax accounting rules could negatively affect future results.
If such indebtedness is accelerated, there can be no assurance that we will have sufficient financial resources or that we will be able to arrange financing to repay our borrowings at such time.
The semiconductor capital equipment market is characterized by rapid technological change, frequent product introductions, the volatility of product supply and demand, changing customer requirements and evolving industry standards. The nature of this market requires significant research and development expenses to participate, with substantial resources invested in advance of material sales of our products to our customers in this market.
Our markets are characterized by extensive research and development, rapid technological change, frequent new product introductions, changes in customer requirements and evolving industry standards. The nature of these markets require significant research and development expenses to participate, with substantial resources invested in advance of material sales of our products to our customers.
The occurrence and impact of these various risks are difficult to predict, but one or more of them could have a material adverse effect on our business, results of operations, or financial condition.
The occurrence and impact of these various risks are difficult to predict, but one or more of them could have a material adverse effect on our business, results of operations, or financial condition. We may be adversely impacted by any of the multiple uncertainties and outcomes associated with the use and evolution of Artificial Intelligence (“AI”).
Any economic downturn could have a material adverse effect on our business, results of operations, or financial condition. 30 Foreign currency risk may negatively affect our revenues, cost of sales, and operating margins, and could result in foreign exchange losses. We conduct our business and incur costs in the local currency of most countries in which we operate.
Risks Related to Capitalization and Financial Markets Foreign currency risk may negatively affect our revenues, cost of sales, and operating margins, and could result in foreign exchange losses. We conduct our business and incur costs in the local currency of most countries in which we operate.
Any such actions, if necessary, may not be able to be effected on commercially reasonable terms or at all, or on terms that would be advantageous to our stockholders, or on terms that would not require us to breach the terms and conditions of our existing or future debt agreements.
Any such actions, if necessary, may not be able to be effected on commercially reasonable terms or at all, or on terms that would be advantageous to our stockholders, or on terms that would not require us to breach the terms and conditions of our existing or future debt agreements. 26 The agreements that govern our senior credit facilities and our 5.000% senior notes due 2029 contain various covenants that impose restrictions on our business, which may affect our ability to operate our businesses.
Some of our competitors may have financial, technical, marketing, or other capabilities that are more extensive than ours. They may be able to respond more quickly than we can to new or emerging technologies and other competitive pressures. We may not be able to compete successfully against our present or future competitors.
We may encounter substantial competition from other companies in the same market, including established companies with significant resources. Some of our competitors may have financial, technical, marketing, or other capabilities that are more extensive than ours. They may be able to respond more quickly than we can to new or emerging technologies and other competitive pressures.
We are highly dependent upon the experience and continuing services of certain scientists, engineers, production, sales, and management personnel. Competition for the services of these personnel is intense. There can be no assurance that we will be able to retain or attract the personnel necessary for our success.
Our success requires us to attract, retain, and develop key personnel and maintain good relations with our employees. We are highly dependent upon the experience and continuing services of certain scientists, engineers, production, sales, and management personnel. Competition for the services of these personnel is intense.
We have a substantial amount of debt, which could adversely affect our business, financial condition, or results of operations and prevent us from fulfilling our debt-related obligations.
We may incur losses related to foreign currency fluctuations, and foreign exchange controls may prevent us from repatriating cash in countries outside the United States. We have a substantial amount of debt, which could adversely affect our business, financial condition, or results of operations and prevent us from fulfilling our debt-related obligations.
To the extent that we complete acquisitions, we may be unsuccessful in integrating acquired companies or product lines with existing operations, or the integration may be more difficult or more costly than anticipated.
We may be unsuccessful in integrating acquired companies or product lines with existing operations, or may fail to realize some or all of the anticipated benefits of an acquisition if the integration process is more difficult or more costly than anticipated.
This may have the effect of reducing funds available for working capital, capital expenditures, acquisitions and other general corporate purposes, thereby negatively affecting the interests of holders of our other capital stock, including our common stock. 42 Holders of our Series B Preferred Stock can exercise significant control over us, which could limit the ability of holders of our other capital stock to influence the outcome of key transactions, including a change of control.
This may have the effect of reducing funds available for working capital, capital expenditures, acquisitions and other general corporate purposes, thereby negatively affecting the interests of holders of our other capital stock, including our common stock.
Alternatively, downturns in the industries in which we compete, or changes in technology, may cause our customers to significantly and abruptly reduce their demand, or even cancel orders.
Inability to satisfy customer demand in a timely manner may harm our reputation, reduce our other opportunities, damage our relationships with customers, reduce revenue growth, and/or cause us to incur contractual penalties. Alternatively, downturns in the industries in which we compete, or changes in technology, may cause our customers to significantly and abruptly reduce their demand, or even cancel orders.
The loss of one or more of our large customers, any reduction or delay in sales to these customers, our inability to successfully develop relationships with additional customers, or future price concessions that we may make could significantly harm our business. 37 Actions that we are taking to restructure our business in alignment with our strategic priorities may not be as effective as anticipated.
The loss of one or more of our large customers, any reduction or delay in sales to these customers, our inability to successfully develop relationships with additional customers, or future price concessions that we may make could significantly harm our business. Large end-user service providers and product companies comprise a significant portion of our customer base.
Although we are attempting to expand our customer base, we expect that significant customer concentration will continue for the foreseeable future.
Our success will depend on our continued ability to develop and manage relationships with our large customers and their continued need for our products. Although we are attempting to expand our customer base, we expect that significant customer concentration will continue for the foreseeable future.
Our failure to compete effectively could have a material adverse effect on our business, results of operations, or financial condition. A significant portion of our business may be subject to cyclical market factors. Our business is dependent on the demand for products produced by end-users of industrial, communications, electronics, and instrumentation markets.
A significant portion of our business is subject to cyclical market factors and we may fail to accurately estimate the size and growth rate of our markets and our customers’ demands. Our business is dependent on the demand for products produced by end-users of communications, industrial, instrumentation and electronics markets.
Natural disasters or other global or regional catastrophic events could disrupt our operations, give rise to substantial environmental hazards, and adversely affect our results.
Natural disasters or other global or regional catastrophic events could disrupt our operations, give rise to substantial environmental hazards, and adversely affect our results. We and our subcontractors manufacture products using highly complex processes that require technologically advanced equipment and continuous modification to improve yields and performance.
In addition, we may enter into other credit agreements or other debt arrangements from time to time which contain similar or more extensive restrictive covenants and events of default, in which case we may face similar or additional limitations as a result of the terms of those credit agreements or other debt arrangements. 31 Any inability to access financial markets from time to time to raise required capital, finance our working capital requirements or our acquisition strategies, or otherwise support our liquidity needs could negatively impact our ability to finance our operations, meet certain obligations, or implement our growth strategy.
In addition, we may enter into other credit agreements or other debt arrangements from time to time which contain similar or more extensive restrictive covenants and events of default, in which case we may face similar or additional limitations as a result of the terms of those credit agreements or other debt arrangements.
If we fail to fulfill our commitments under these supply agreements, our business, after using all remedies available, financial condition, and results of operations may suffer a material adverse effect. We depend on highly complex manufacturing processes that require strategic materials, components, and products from limited sources of supply.
As a result, downturns in regional or worldwide economies could have a material adverse effect on our business, results of operations, or financial condition. We depend on highly complex manufacturing processes that require strategic materials, components, and products from limited sources of supply.
Additionally, the terms these large customers require, such as most-favored customer or exclusivity provisions, may impact our ability to do business with other customers and generate revenues from such customers. The adoption of new climate change regulations may result in increased financial costs and/or losses.
Additionally, the terms these large customers require, such as most-favored customer or exclusivity provisions, may impact our ability to do business with other customers and generate revenues from such customers. Products that fail to meet specifications, are defective, or are otherwise incompatible with end uses could impose significant costs on us.
We may be unable to successfully implement our acquisitions strategy or integrate acquired companies and personnel with existing operations. We have acquired several relatively large companies, including Finisar Corporation in September 2019 and Coherent, Inc. in July 2022.
We may be unable to successfully implement our acquisitions strategy, integrate acquired companies and personnel with existing operations, or capitalize on any decision to strategically divest one or more current businesses. We have completed acquisitions and divestitures in the past, including most recently the acquisition of Coherent, Inc. in July 2022.
Risks Relating to Our Business and Our Industry Investments in future markets of potential significant growth may not result in the expected return. We continue to make investments in programs with the goal of gaining a greater share of end markets using laser systems, semiconductor lasers and components, including the key components for fast growth markets.
We continue to make investments in programs with the goal of gaining a greater share of end markets, including the key components for fast growth markets. We cannot guarantee that our investments in capital and capabilities will be sufficient.
These fluctuations may be unrelated to our performance or out of our control, and could lead to securities class action litigations that could result in substantial expenses and diversion of management’s attention and corporate resources, any or all of which could adversely affect our business, financial condition, and results of operations. 40 Provisions in our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws and the Pennsylvania Associations Code (the “Code”) may delay or prevent our acquisition by a third party, which could also reduce the market price of our capital stock.
Provisions in our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws and the Pennsylvania Associations Code (the “Code”) may delay or prevent our acquisition by a third party, which could also reduce the market price of our capital stock.
These features of the Series B Preferred Stock could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management. We do not currently intend to pay dividends on our common stock; holders will benefit from an investment in our common stock only if it appreciates in value.
These features of the Series B Preferred Stock could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management. Our ability to declare and pay dividends on our capital stock may be limited, including by the terms of our existing Credit Agreement.
Although we do not know of any material environmental, safety, or health problems in our properties, processes, or products, there can be no assurance that problems will not develop in the future that could have a material adverse effect on our business, results of operations, or financial condition.
There can be no assurance that we will be able to retain or attract the personnel necessary for our success. The loss of the services of our key personnel could have a material adverse effect on our business, results of operations, or financial condition.
If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures. There are limitations on the protection of our intellectual property, and we may from time to time be involved in costly intellectual property litigation or indemnification.
If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures. The trading price of our common stock has been, and may continue to be, volatile. Our common stock has experienced substantial price volatility in the past and may continue to do so in the future.
The success of our acquisitions will depend in large part on our success in integrating the acquired operations, strategies, technologies, and personnel. We may fail to realize some or all of the anticipated benefits of an acquisition if the integration process takes longer than expected or is more costly than expected.
To the extent that we complete acquisitions, the success of our acquisitions will depend in large part on our success in integrating the acquired operations, strategies, technologies, and personnel.
We may encounter increased competition, and we may fail to accurately estimate our competitors’ or our customers’ willingness and capability to backward integrate into our competencies and thereby displace us. We may encounter substantial competition from other companies in the same market, including established companies with significant resources.
Any of the foregoing items could have a material adverse effect on our business, results of operations, or financial condition. We may encounter increased competition, and we may fail to accurately estimate our competitors’ or our customers’ willingness and capability to backward integrate into our competencies and thereby displace us.
Failure to accurately forecast our customer demands and our resulting revenues could result in additional charges for obsolete or excess inventories or noncancellable purchase commitments. We base many of our operating decisions including, but not limited to, those regarding manufacturing capacity and staffing, and enter into purchase commitments, on the basis of anticipated revenue trends that are highly unpredictable.
Shifts like these could have an adverse effect on our business, results of operations and financial condition, as we base many of our operating decisions including, but not limited to, those regarding manufacturing capacity and staffing, and enter into purchase commitments, on the basis of anticipated revenue trends.
Circumstances may occur in which the interests of BCPE could conflict with the interests of holders of other outstanding capital stock, including our common stock. Reports published by securities or industry analysts, freelance bloggers and credit rating agencies, including projections in those reports that exceed our actual results, could adversely affect our share price and trading volume.
Circumstances may occur in which the interests of BCPE could conflict with the interests of holders of other outstanding capital stock, including our common stock. 30
The failure to do so could have a material adverse effect on our ability to grow our business and maintain our competitive position and on our results of operations and/or financial condition.
We may not be able to compete successfully against our present or future competitors. Our failure to compete effectively could have a material adverse effect on our business, results of operations, or financial condition. Global economic downturns may adversely affect our business, results of operations, and financial condition.
Some of our business units depend from time to time on large purchases from a few large customers, and any loss, cancellation, reduction, or delay in purchases by these large customers could harm the longevity of the business.
Any loss, cancellation, reduction, or delay in purchases by these large customers could harm the longevity of our business. A small number of customers have consistently accounted for a significant portion of our revenues, with two customers each contributing more than 10% of total revenues in fiscal 2025.
We use our estimates to determine the levels of business we seek and accept, production schedules, personnel needs, and other resource requirements. 26 Customers may require rapid increases in production on short notice. We may not be able to purchase sufficient supplies or allocate sufficient manufacturing capacity to meet such increases in demand.
We may not be able to purchase sufficient supplies or allocate sufficient manufacturing capacity to meet such increases in demand. Rapid customer ramp-up and significant increases in demand may strain our resources or negatively affect our margins.
The costs of compliance with privacy, cybersecurity and data protection laws continue to increase as do the risks of enforcement, and cumulatively the impact of these could have a material effect on our business, results of operations, or financial condition.
Compliance with or our failure to comply with, laws, regulations, or industry standards could have a material adverse effect on our business, results of operations, or financial condition. Our operations are subject to environmental, health and safety risks and requirements which could adversely affect our business, results of operations and reputation.
Any such material charges, whether related to goodwill or purchased intangible assets, may have a material negative impact on our financial and operating results. 39 If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
Any such material charges, whether related to goodwill or purchased intangible assets, may have a material negative impact on our financial and operating results. Risks Related to Intellectual Property and Litigation There are limitations on the protection of our intellectual property, and we may from time to time be involved in costly intellectual property litigation or indemnification.
Many of these end-users are in industries that have historically experienced a highly cyclical demand for their products. As a result, demand for our products is subject to these cyclical fluctuations. Fluctuations in demand could have a material adverse effect on our business, results of operations or financial condition.
Many of these end-users are in industries that have historically experienced a highly cyclical demand for their products. We make significant decisions based on our estimates of customer requirements. We use our estimates to determine the levels of business we seek and accept, production schedules, personnel needs, and other resource requirements.
In addition, stock markets have experienced extreme price and volume fluctuations in recent years. Moreover, these fluctuations frequently have been unrelated to the operating performance or underlying fundamentals of the affected companies. These broad market fluctuations, including fluctuations within our industry peer group, may adversely affect the market price of our common stock.
Additionally, we, the technology industry, and the stock market as a whole have on occasion experienced extreme stock price and volume fluctuations that have affected stock prices in ways that may have been unrelated to the specific operating performance of individual companies.
Our failure to address rapid technological changes in our markets could adversely affect our business and results of operations. If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings.
Our failure to address rapid technological changes in our markets, or the failure of either our customers’ or our products to gain market acceptance, or the failure of the markets in which we participate to grow could adversely affect our business and results of operations. In addition, customers may require rapid increases in production on short notice.
Investigations, claims, disputes, enforcement actions, litigation or other legal proceedings could have a material adverse effect on our business, results of operations, or financial condition. We may face particular data privacy and security and data protection risks due to laws and regulations regulating the protection or security of personal and other sensitive data.
Legal, regulatory and administrative investigations, inquiries, proceedings, and claims could have a material adverse effect on our business, results of operations, or financial condition. From time to time, we are subject to various legal, regulatory and administrative investigations, inquiries, proceedings, and claims that arise out of the ordinary conduct of our business or otherwise, both domestically and internationally.
Any inability to respond in an effective and timely manner to issues in our global operations could have a material adverse effect on our business, results of operations, or financial condition.
Any of the effects described in this risk factor could have a material adverse effect on our business, results of operations, or financial condition. The technology industry is subject to intense media, political, and regulatory scrutiny, which can increase our exposure to government investigations, legal actions, and penalties.
In addition, the overall integration of an acquired business can be a time-consuming and expensive process that, without proper planning and effective and timely implementation, could significantly disrupt our business. 25 Potential difficulties that we may encounter in the integration process include: • the integration of management teams, strategies, technologies and operations, products, and services; • the disruption of ongoing businesses and distraction of their respective management teams from ongoing business concerns; • the retention of, and possible decrease in business from, existing customers; • the creation of uniform standards, controls, procedures, policies, and information systems; • the reduction of the costs associated with combined operations; • the integration of corporate cultures and maintenance of employee morale; • the retention of key employees; and • potential unknown liabilities associated with the acquired business.
In addition, the overall integration of an acquired business can be a time-consuming and expensive process that, without proper planning and effective and timely implementation, could significantly disrupt our business.
This can impact short-term service demand and cause some fluctuations in the Laser segment service revenues. Increases in commodity prices and diminished availability of rare earth minerals and noble gases may adversely affect our results of operations and financial condition.
Furthermore, government authorities may take retaliatory actions, impose conditions for the supply of products or require the license or other transfer of IP, which could have a material adverse effect on our business. Increases in commodity prices and diminished availability of rare earth minerals and noble gases may adversely affect our results of operations and financial condition.
Credit facilities, indentures, or other financing agreements that we enter into in the future also may contain provisions that restrict or prohibit our ability to pay cash dividends on our capital stock.
The terms of the Credit Agreement contain a restriction on our ability to pay cash dividends on our capital stock.
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Our products may contain defects that are not detected until deployed, which could increase our costs, reduce our revenues, cause us to lose key customers, or expose us to litigation related to our products. Some systems that use our products are inherently complex in design.
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Risks Related to Our Business, Operations and Industry Our competitive position depends on our ability to develop new products and processes and may require significant investment.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Item 1C. CYBERSECURITY Coherent’s Board of Directors (the “Board”) recognizes the critical importance of maintaining the trust and confidence of our customers, suppliers, business partners, employees, shareholders and other stakeholders.
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Item 1C. CYBERSECURITY Risk Management and Strategy We have established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats and have integrated these processes into our overall risk management systems and processes. We have aligned our cybersecurity program with recognized security frameworks such as NIST-CSF (National Institute of Standard and Technologies – Cybersecurity Framework).
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One of the critical factors in maintaining this trust is by the Board being involved in oversight of the Company’s enterprise risk management (“ERM”) program, of which cybersecurity represents a critical component.
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We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.
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Coherent’s cybersecurity policies, standards, processes and practices are fully integrated into the Company’s ERM program and are based on recognized frameworks established by the National Institute of Standards and Technology, and the International Standards Organization Risk Management Guidelines (ISO 31000), as well as other applicable industry standards.
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We maintain a risk based approach to identify cybersecurity threats, and conduct assessments to determine if our information systems are vulnerable to such cybersecurity threats.
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Governance: Coherent’s cybersecurity program is overseen by the Board’s Environment, Sustainability and Governance (“ESG”) committee. The ESG Committee is briefed quarterly by management on, among other things, updates to cybersecurity and related programs, and notable cyber incidents, threats and vulnerabilities, and provides direction on cybersecurity risk management.
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This includes identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.
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In addition, Coherent has established a Crisis Management Team (CMT) with responsibility for, among other things, oversight and management of cybersecurity events, including significant and material cybersecurity events. The CMT reports, as appropriate, to the ESG Committee. The CMT is headed by Coherent’s Chief Risk Officer (CRO).
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We maintain reasonable safeguards to minimize identified risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards. We devote significant resources and designate high-level personnel, including our Chief Information Officer and Global Head of Cybersecurity, to manage the risk mitigation process.
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Additionally, Coherent has a dedicated internal cybersecurity team (Cybersecurity Team), managed by the Global Head of Cybersecurity.
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We have implemented technical solutions that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality, and access controls. We regularly evaluate, monitor, and improve these solutions.
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Collaborative Approach: The Company has implemented a comprehensive, cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner.
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As part of our overall risk management system, we monitor and test our safeguards and train our employees on these safeguards, in collaboration with human resources, information technology, legal, compliance and ethics and management. Personnel at all levels and departments are made aware of our cybersecurity policies through periodic trainings. We periodically engage consultants, auditors, or other third parties.
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On a regular meeting cadence, Coherent’s President convenes a senior cybersecurity committee for reporting and planning. The committee consists of the Chief Information Officer (CIO), the Global Head of Cybersecurity, the Vice President of IT Operations, the Senior Director of IT Security, the General Counsel for Technology and Risk Management, and the CRO.
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These service providers assist us to design, implement or assess our cybersecurity policies and procedures, as well as to monitor and test our safeguards. We work with our third-party suppliers and service providers to address the use of appropriate security measures in connection with their work with us.
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Members of partner technology-risk advisory firms and Coherent internal experts from other disciplines participate in committee activities as needed from time to time.
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Like any other technology company operating in today’s environment, we have experienced cybersecurity incidents in the past and may experience them in the future. However, we have not experienced any cybersecurity incidents that have been determined to be material.
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As to experience of the various members of Coherent’s cybersecurity functional team, the CIO is a technology executive with over 25 years of experience at public companies, specializing in IT leadership, cybersecurity, and strategic technology initiatives, including leading risk management, data governance, compliance, and SOX audits, aligning technology with business goals and robust data protection.
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For additional information regarding risks from cybersecurity threats, and their effect on our company, including our business strategy, results of operations, or financial condition, please refer to “Item 1A.
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He holds a B.S. in Electrical Engineering and ITIL certification. The Coherent Global Privacy Officer earned a B.A. and a Juris Doctor degree and has over 20 years of experience in legal practice, focusing specifically on privacy law for the past eight years.
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Risk Factors – Risks Related to Our Business, Operations, and Industry – Cybersecurity attacks and incidents and other vulnerabilities could subject us to costly damages, claims and expenses, harm to our reputation or competitive position, or disrupt our operations and business.” Governance One of the key functions of our Board of Directors is informed oversight of our risk management process, including risks from cyber security threats.
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Additionally, the Coherent Global Privacy Officer is an active member of the International Association of Privacy Professionals (IAPP) and holds both the Certified Information Privacy Professional/Europe (CIPP/E) and Certified Information Privacy Manager (CIPM) certifications from the IAPP.
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Our Board of Directors is responsible for monitoring and assessing strategic risk exposure, and our executive officers are responsible for the day-to-day management of the material risks we face. Our Board of Directors administers its cybersecurity risk oversight function through the Nominating and Corporate Governance (“NCG”) Committee.
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The General Counsel for Technology and Risk Management holds a B.S. in Industrial Engineering, and a Juris Doctor degree and has over 38 years of experience in legal practice, 25 years of which specifically representing businesses and financial institutions in data security and privacy in both private practice and as at in-house attorney at various private and public companies.
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The NCG Committee is briefed quarterly by management on, among other things, our company’s cybersecurity risks and activities, including any recent cybersecurity incidents and related responses, cybersecurity systems testing, activities of third parties, and the like. The NCG Committee provides regular updates to the Board of Directors on such reports.
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The Senior Manager, Security, Risk & Compliance, has been in Information Technology for 25 years and in IT security for 16 years, and holds a B.S. in Computer Science, with a minor in Mathematics, and an ISC2 CISSP Certification. He is a member of the ACM and a Senior Member of the IEEE.
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Our Chief Information Officer and Global Head of Cybersecurity have combined relevant experience of more than 45 years, including over 20 years in cybersecurity, and they oversee our cyber security policies and processes, including those described in “Risk Management and Strategy” above.
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The Senior Director of Information Security is a CISSP and member of ISSA, practicing security for over 30 years, with a B.S. degree. He also has served as a consultant and has managed international cybersecurity teams with Fortune 100 companies in finance, banking, technology, biotech, security consulting, and large manufacturing in broad areas of cybersecurity.
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Our Global Head of Cybersecurity monitors and keeps informed about prevention, detection, mitigation, and remediation efforts through regular communication and reporting from our cybersecurity team, and through the use of technological tools and software and results from third party assessments. 31
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The VP of IT Infrastructure Operations and Interim Head of Information Security and Compliance has 25 years of experience at public companies, specializing in IT leadership, cybersecurity, and strategic technology initiatives, and holds a M.S. in Electrical Engineering.
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Incident Response and Recovery Planning : Coherent has instituted a robust Cybersecurity Incident Response Plan (the CIRP), which provides a framework for responding to cybersecurity incidents at escalating severity levels.
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The CIRP sets out a coordinated approach to discovering, investigating, containing, tracking, mitigating, and remediating cybersecurity incidents, including a framework for elevating and reporting findings and keeping senior management and other key stakeholders informed and involved, based on assessments regarding the scope or significance of incidents.
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The CIRP is implemented by the Coherent Cyber Incident Response Team (CIRT), which is headed by the Global Head of Cybersecurity, and includes as members the head of the CMT, the Chief Legal Officer, the Cybersecurity Team, and select members of the ERM team.
Removed
Technical Safeguards : The Company deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence. 44 Security Policy and Requirements : The Coherent Cybersecurity Team has robust processes and redundancies in place designed with the objective of deterring, detecting, mitigating, and responding to potential cybersecurity threats, which includes a vulnerability assessment and prioritization, and as necessary, remediation plans.
Removed
The Cybersecurity Team also performs periodic system penetration testing to validate the Company’s security controls and assess Coherent’s infrastructure and applications. All employees take mandatory periodic security awareness training on the Company’s data security policies and procedures, which is supplemented by Company-wide testing initiatives, including periodic phishing tests.
Removed
Additionally, the IT group and the Cybersecurity Team participate in annual tabletop exercises designed to simulate a response to a cybersecurity incident. The Cybersecurity Team incorporates the findings from these exercises into the Coherent processes. Further, in 2023, select members of the senior management team and the Cybersecurity Team participated in a tabletop exercise.
Removed
Third-Party Risk Management : The Company maintains a risk-based approach to identifying and overseeing cybersecurity risks presented by third parties.
Removed
This includes external third parties that may have permission to access Coherent IT systems and assets, such as consultants, and review of the systems of third parties that could adversely impact Coherent’s infrastructure in the event of a cybersecurity incident affecting those third-party systems, such as through vendors and other service providers.
Removed
The Company also regularly engages third parties to perform assessments on our cybersecurity measures, including information security maturity assessments, audits and independent reviews of our information security control environment and operating effectiveness.
Removed
The results of such assessments, audits and reviews are reported to the Risk Management Committee and the Board, and the Company adjusts its cybersecurity policies, standards, processes and practices as necessary based on the information provided by these assessments, audits and reviews.
Removed
Education and Awareness : The Company provides regular, mandatory training for personnel regarding cybersecurity threats as a means to equip the Company’s personnel with effective tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes and practices.
Removed
Cybersecurity risks and threats, including as a result of any previous cybersecurity incidents, have not materially impacted and are not reasonably expected to materially impact Coherent or Coherent’s operations to date. However, the Company recognizes the ever-evolving cyber risk landscape and cannot provide any assurances that it will not be subject to a material cybersecurity incident in the future.

Item 2. Properties

Properties — owned and leased real estate

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PROPERTIES Information regarding our principal U.S. properties at June 30, 2024, is set forth below: Location Primary Use(s) Primary Business Segment(s) Approximate Square Footage Ownership Sherman, TX Manufacturing Materials 700,000 Owned Easton, PA Manufacturing and Research and Development Materials 281,000 Leased Saxonburg, PA Manufacturing and Research and Development Materials 235,000 Owned and Leased Santa Clara, CA Manufacturing and Research and Development Lasers 200,000 Owned Warren, NJ Manufacturing and Research and Development Materials 159,000 Leased Newark, DE Manufacturing and Research and Development Materials 135,000 Leased Fremont, CA Manufacturing and Research and Development Materials 122,000 Leased Murrieta, CA Manufacturing and Research and Development Materials 108,000 Leased Information regarding our principal foreign properties at June 30, 2024, is set forth below: 45 Location Primary Use(s) Primary Business Segment(s) Approximate Square Footage Ownership China Manufacturing, Research and Development, and Distribution Materials and Networking 2,993,000 Owned and Leased Germany Manufacturing, Research and Development Lasers 911,000 Owned and Leased Malaysia Manufacturing, Research and Development Networking 863,000 Owned Vietnam Manufacturing Materials and Networking 719,000 Owned and Leased Philippines Manufacturing Materials 426,000 Leased United Kingdom Manufacturing, Research and Development Materials and Networking 319,000 Owned and Leased Germany Manufacturing and Distribution Materials and Networking 138,000 Owned and Leased Switzerland Manufacturing, Research and Development, and Distribution Materials 112,000 Leased The square footage listed for each of the above properties represents facility square footage, except in the case of the Philippines location, which includes land.
PROPERTIES Information regarding our principal U.S. properties at June 30, 2025, is set forth below: Location Primary Use(s) Primary Business Segment(s) Approximate Square Footage Ownership Sherman, TX Manufacturing Materials 700,000 Owned Easton, PA Manufacturing and Research and Development Materials 281,000 Leased Saxonburg, PA Manufacturing and Research and Development Materials 235,000 Owned and Leased Santa Clara, CA Manufacturing, Research and Development and Administration Lasers 199,993 Owned Newark, DE Manufacturing and Research and Development Materials 135,000 Leased Fremont, CA Manufacturing and Research and Development Materials 121,556 Leased Murrieta, CA Manufacturing and Research and Development Materials 108,000 Leased Information regarding our principal foreign properties at June 30, 2025, is set forth below: Location Primary Use(s) Primary Business Segment(s) Approximate Square Footage Ownership China Manufacturing, Research and Development, and Distribution Materials and Networking 3,310,650 Owned and Leased Germany Manufacturing, Research and Development Lasers 892,000 Owned and Leased Malaysia Manufacturing, Research and Development Networking 889,205 Owned Vietnam Manufacturing Materials and Networking 719,000 Owned and Leased Philippines Manufacturing Materials 426,240 Leased United Kingdom Manufacturing, Research and Development Lasers and Networking 187,568 Owned and Leased Germany Manufacturing and Distribution Materials and Networking 137,700 Owned and Leased Finland Manufacturing Lasers 122,106 Leased Switzerland Manufacturing, Research and Development, and Distribution Materials 112,000 Leased The square footage listed for each of the above properties represents facility square footage, except in the case of the Philippines location, which includes land.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Dividends on the Company’s Series B Convertible Preferred Stock will be payable on a cumulative basis when, as and if declared by our Board of Directors, or an authorized committee of our Board of Directors, at an annual rate of 5%, subject to increase if Coherent defaults on payment obligation with respect to these shares, not to exceed 14% per annum.
Dividends on the Company’s Series B Convertible Preferred Stock will be payable on a cumulative basis when, as and if declared by our Board of Directors, or an authorized committee of our Board of Directors, at an annual rate of 5%, subject to increase if Coherent defaults on its payment obligation with respect to these shares, not to exceed 14% per annum.
PERFORMANCE GRAPH The following graph compares cumulative total shareholder return on the Company’s common stock with the cumulative total shareholder return of the Russell 1000 Index and with a peer group of companies constructed by the Company for the period from June 30, 2019, through June 30, 2024.
PERFORMANCE GRAPH The following graph compares cumulative total shareholder return on the Company’s common stock with the cumulative total shareholder return of the Russell 1000 Index and with a peer group of companies constructed by the Company for the period from June 30, 2020, through June 30, 2025.
The Company’s current fiscal year peer group includes IPG Photonics Corp., Wolfspeed Inc., Lumentum Holdings, Inc., Corning, Inc., MKS Instruments, Inc., and Honeywell International, Inc. 47 48
The Company’s current fiscal year peer group includes IPG Photonics Corp., Wolfspeed Inc., Lumentum Holdings, Inc., Corning, Inc., MKS Instruments, Inc., and Honeywell International, Inc. 33 34
As of August 13, 2024, there were approximately 906 holders of record of our common stock. The Company historically has not paid cash dividends on its common stock and does not presently anticipate paying cash dividends on its common stock in the future.
As of August 11, 2025, there were approximately 790 holders of record of our common stock. The Company historically has not paid cash dividends on its common stock and does not presently anticipate paying cash dividends on its common stock in the future.
Removed
ISSUER PURCHASES OF EQUITY SECURITIES In August 2014, the Company’s Board of Directors authorized the Company to purchase up to $50 million of its common stock through a share repurchase program (the “Program”) that calls for shares to be purchased in the open market or in private transactions from time to time.
Added
Dividends of $11 million on our Series B-1 Convertible Preferred Stock were paid in cash in the fourth quarter of fiscal 2025. ISSUER PURCHASES OF EQUITY SECURITIES The Company did not repurchase any shares of its common stock during the fiscal year ended June 30, 2025, and no stock repurchase program was in effect during the period.
Removed
The Program had no expiration and could be suspended or discontinued at any time. Shares purchased by the Company are retained as treasury stock and available for general corporate purposes. The Company did not repurchase shares pursuant to this Program during the fiscal years ended June 30, 2024 or June 30, 2023.
Removed
As of June 30, 2024, the Company has cumulatively purchased 1,416,587 shares of its common stock pursuant to the Program for approximately $22 million. On February 21, 2024, the Company’s Board of Directors terminated the Program and any remaining amount authorized for the repurchase of shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Changes in estimates used in these and other items could impact the Consolidated Financial Statements. Goodwill We test goodwill for impairment annually, and when events or changes in circumstances indicate that goodwill might be impaired. The determination of whether goodwill is impaired requires us to make judgments based on long-term projections of future performance.
Changes in estimates used in these and other items could impact the Consolidated Financial Statements. 36 Goodwill We test goodwill for impairment annually, and when events or changes in circumstances indicate that goodwill might be impaired. The determination of whether goodwill is impaired requires us to make judgments based on long-term projections of future performance.
We will continue to monitor any changes to our assumptions and will evaluate goodwill as deemed warranted during future periods. 51 Income Taxes The Company prepares and files tax returns based on its interpretation of tax laws and regulations and records estimates based on these judgments and interpretations.
We will continue to monitor any changes to our assumptions and will evaluate goodwill as deemed warranted during future periods. Income Taxes The Company prepares and files tax returns based on its interpretation of tax laws and regulations and records estimates based on these judgments and interpretations.
Restructuring Charges. Restructuring charges related to our Restructuring Plan for the year ended June 30, 2024 were $27 million, or 1% of revenues, and consist primarily of accelerated depreciation, equipment write-offs and move costs due to the consolidation of certain manufacturing sites.
Restructuring Charges. Restructuring charges related to our 2023 Plan for the year ended June 30, 2024 were $27 million, or 1% of revenues, and consist primarily of accelerated depreciation, equipment write-offs and move costs due to the consolidation of certain manufacturing sites.
The decrease in revenues during the current fiscal year was primarily related to a decrease of $265 million in the electronics market mostly due to lower volumes in our consumer electronics vertical largely due to a design change implemented by a significant electronics customer, partially offset by higher shipments in our automotive vertical driven by electric vehicles, as well as decreases in shipments to a lesser extent derived from macroeconomic conditions in our precision manufacturing and semiconductor capital equipment verticals in the industrial market.
The decrease in revenues during fiscal 2024 was primarily related to a decrease of $265 million in the electronics market mostly due to lower volumes in our consumer electronics vertical largely due to a design change implemented by a significant electronics customer, partially offset by higher shipments in our automotive vertical driven by electric vehicles, as well as decreases in shipments to a lesser extent derived from macroeconomic conditions in our precision manufacturing and semiconductor capital equipment verticals in the industrial market.
Estimates of fair value are based on our projection of revenues, operating costs and cash flows of each reporting unit, considering historical and anticipated results and general economic and market conditions and their projections. For fiscal year 2024, we performed a quantitative assessment.
Estimates of fair value are based on our projection of revenues, operating costs and cash flows of each reporting unit, considering historical and anticipated results and general economic and market conditions and their projections. For fiscal year 2025, we performed a quantitative assessment.
Restructuring charges related to our Restructuring Plan for the year ended June 30, 2023 were $119 million, or 2% of revenues, and consisted of severance and equipment write-offs, net of reimbursements, due to the consolidation of certain manufacturing sites. See Note 22.
Restructuring charges related to our 2023 Plan for the year ended June 30, 2023 were $119 million, or 2% of revenues, and consisted of severance and equipment write-offs, net of reimbursements, due to the consolidation of certain manufacturing sites. See Note 20.
Net loss attributable to noncontrolling interests for the year ended June 30, 2024 was $3 million, and represents the noncontrolling interest holders’ shares of losses of Silicon Carbide LLC after the close of the transaction on December 4, 2023. See Note 12.
Net loss attributable to noncontrolling interests for the year ended June 30, 2024 was $3 million, and represents the noncontrolling interest holders’ shares of losses of Silicon Carbide LLC after the close of the transaction on December 4, 2023. See Note 11.
The IR&D expenses are primarily related to our continued investment in new products and platform technologies in an effort to accelerate our organic growth across all of our businesses, including significant investments in datacom transceivers for AI, indium phosphide and gallium arsenide semiconductor lasers, silicon carbide materials, and lasers for display processing, semiconductor capital equipment, and instrumentation.
The R&D expenses are 41 primarily related to our continued investment in new products and platform technologies in an effort to accelerate our organic growth across all of our businesses, including significant investments in datacom transceivers for AI, indium phosphide and gallium arsenide semiconductor lasers, silicon carbide materials, and lasers for display processing, semiconductor capital equipment, and instrumentation.
Financing inflows in the current year included the $1.0 billion contribution from noncontrolling interests and proceeds from employee stock purchases, partially offset by payments on existing debt and equity issuance costs related to the contribution from noncontrolling interests.
Financing inflows in the prior year included the $1.0 billion contribution from noncontrolling interests and proceeds from employee stock purchases, partially offset by payments on existing debt and equity issuance costs related to the contribution from noncontrolling interests.
Gross margin, excluding the fair value adjustment on acquired inventory, decreased 349 basis points for fiscal 2024 compared to fiscal 2023 primarily due to lower revenues, less favorable sales mix especially in the datacom vertical in the communications market, underutilized operating capacity in several plants, shut down costs related to site consolidations, lower yields in the datacom vertical, higher costs related to product lines that are being exited, higher inventory provisions and the unfavorable foreign exchange rates. 53 Internal research and development.
Gross margin, excluding the fair value adjustment on acquired inventory, decreased 349 basis points for fiscal 2024 compared to fiscal 2023 primarily due to lower revenues, less favorable sales mix especially in the datacom vertical in the communications market, underutilized operating capacity in several plants, shut down costs related to site consolidations, lower yields in the datacom vertical, higher costs related to product lines that are being exited, higher inventory provisions and the unfavorable foreign exchange rates.
Gross margin for the year ended June 30, 2024 was $1,456 million, or 30.9%, of total revenues, compared to $1,618 million, or 31.4% of total revenues, for fiscal 2023, a slight decrease of 43 basis points.
Gross margin for the year ended June 30, 2024 was $1,456 million, or 31%, of total revenues, compared to $1,618 million, or 31% of total revenues, for fiscal 2023, a slight decrease of 43 basis points.
As of June 30, 2024, the Company had no borrowings outstanding under the Revolving Credit Facility. Weighted Average Interest Rate The weighted average interest rate of total borrowings was 7% and 6% for the years ended June 30, 2024 and 2023, respectively.
As of June 30, 2025, the Company had no borrowings outstanding under the Revolving Credit Facility. Weighted Average Interest Rate The weighted average interest rate of total borrowings was 6% and 7% for the years ended June 30, 2025 and 2024, respectively.
Selling, general and administrative. Selling, general and administrative (“SG&A”) expenses for the year ended June 30, 2024 were $854 million, or 18% of revenues, compared to $1,037 million, or 20% of revenues, last fiscal year.
Selling, general and administrative. Selling, general and administrative (“SG&A”) expenses for the year ended June 30, 2024 were $854 million, or 18% of revenues, compared to $1,037 million, or 20% of revenues, for fiscal 2023.
In addition, interest expense increased $2 million due to higher interest rates on our Term facilities, net of higher benefit from our interest rate cap and swap. Income taxes. Our effective income tax rate for fiscal 2024 was (8)%, compared to an effective tax rate of 27% last fiscal year.
In addition, interest expense increased $2 million due to higher interest rates on our Term facilities, net of higher benefit from our interest rate cap and swap. Income taxes. Our effective income tax rate for fiscal 2024 was (8)%, compared to an effective tax rate of 27% for fiscal 2023.
The Company believes existing cash, cash flow from operations, and available borrowing capacity from its Senior Credit Facilities will be sufficient to fund its needs for working capital, capital expenditures, repayment of scheduled long-term borrowings and lease obligations, investments in IR&D, and internal and external growth objectives at least through fiscal year 2025.
The Company believes existing cash, cash flow from operations, and available borrowing capacity from its Senior Credit Facilities will be sufficient to fund its needs for working capital, capital expenditures, repayment of scheduled long-term borrowings and lease obligations, investments in R&D, and internal and external growth objectives at least through fiscal year 2026.
Noncontrolling Interests to the Company’s Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information. Segment Reporting Revenues and operating income for our reportable segments are discussed below.
Noncontrolling Interests to the Company’s Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information. Segment Reporting Revenues and segment profit for our reportable segments are discussed below.
As further amended, the New Term B Loans bear interest at a SOFR rate (subject to a 0.50% floor) plus 2.50% as of June 30, 2024. The maturity of the New Term Loans and revolving credit facility remains unchanged.
As further amended, the New Term B-2 Loans bear interest at a SOFR rate (subject to a 0.50% floor) plus 2.00% as of June 30, 2025. The maturity of the New Term B-2 Loans and revolving credit facility remains unchanged.
Restructuring Plan to the Company’s Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information. Interest and other, net. Interest and other, net for the year ended June 30, 2024 was expense of $244 million compared to expense of $318 million last fiscal year, a decrease of $75 million.
Restructuring Plans to the Company’s Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information. Interest and other, net. Interest and other, net for the year ended June 30, 2024 was expense of $244 million compared to expense of $318 million for fiscal 2023, a decrease of $75 million.
Consolidated Revenues. Revenues for the year ended June 30, 2024 decreased 9% to $4,708 million, compared to $5,160 million for the prior fiscal year.
Consolidated Revenues. Revenues for the year ended June 30, 2024 decreased 9% to $4,708 million, compared to $5,160 million for fiscal 2023.
Our cash and cash equivalent balances are generated and held in numerous locations throughout the world, including amounts held outside the United States. As of June 30, 2024 , we held approxim ately $870 million of c ash, cash equivalents and restricted cash outside of the United States.
Our cash and cash equivalent balances are generated and held in numerous locations throughout the world, including amounts held outside the United States. As of June 30, 2025 , we held approxim ately $813 million of c ash, cash equivalents and restricted cash outside of the United States.
Financing outflows included payments to settle the Company’s existing senior credit facilities. 59 New Senior Credit Facilities On July 1, 2022, Coherent entered into a Credit Agreement by and among the Company, the lenders, and other parties thereto, and JP Morgan Chase Bank, N.A., as administrative agent and collateral agent, which provides for senior secured financing of $4.0 billion, consisting of a term loan A credit facility (the “Term A Facility”), with an aggregate principal amount of $850 million, a term loan B credit facility (the “Term B Facility” and, together with the Term A Facility, the “Term Facilities”), with an aggregate principal amount of $2,800 million, and a revolving credit facility (the “Revolving Credit Facility” and, together with the Term Facilities, the “Senior Credit Facilities”), in an aggregate available amount of $350 million, including a letter of credit sub-facility of up to $50 million.
Senior Credit Facilities On July 1, 2022, Coherent entered into a Credit Agreement by and among the Company, the lenders, and other parties thereto, and JP Morgan Chase Bank, N.A., as administrative agent and collateral agent, which provides for senior secured financing of $4.0 billion, consisting of a term loan A credit facility (the “Term A Facility”), with an aggregate principal amount of $850 44 million, a term loan B credit facility (the “Term B Facility” and, together with the Term A Facility, the “Term Facilities”), with an aggregate principal amount of $2,800 million, and a revolving credit facility (the “Revolving Credit Facility” and, together with the Term Facilities, the “Senior Credit Facilities”), in an aggregate available amount of $350 million, including a letter of credit sub-facility of up to $50 million.
From a segment perspective, Materials decreased $333 million year-over-year, primarily due to lower demand for sensing products and other consumer applications in the consumer electronics vertical within the electronics market for the reasons discussed above.
From a segment perspective, Materials decreased $333 million from fiscal 2023, primarily due to lower demand for sensing products and other consumer applications in the consumer electronics vertical within the electronics market for the reasons discussed above.
These relocations and other actions are expected to result in the Company achieving its previously announced $250 million synergy plan, which includes savings from supply chain management, internal supply of enabling materials and components, operational efficiencies in all functions due to scale, global functional model efficiencies and consolidation of corporate costs.
These relocations and other actions resulted in the Company achieving its previously announced $250 million synergy plan, which included savings from supply chain management, internal supply of enabling materials and components, operational efficiencies in all functions due to scale, global functional model efficiencies and consolidation of corporate costs.
Networking revenues decreased $45 million year-over-year, with decreases from the telecom vertical partially offset by increases in the datacom vertical, both in our communications market, for the reasons discussed above.
Networking revenues decreased $45 million from fiscal 2023, with decreases from the telecom vertical partially offset by increases in the datacom vertical, both in our communications market, for the reasons discussed above.
In relation to the Term Facilities, the Company incurred expense of $237 million for the fiscal year ended June 30, 2024, which is included in Interest expense in the Consolidated Statements of Earnings (Loss).
In relation to the Term Facilities, the Company incurred expense of $192 million for the fiscal year ended June 30, 2025, which is included in Interest expense in the Consolidated Statements of Earnings (Loss).
Management believes operating income to be a useful measure for investors, as it reflects the results of segment performance over which management has direct control and is used by management in its evaluation of segment performance. See Note 15.
Management believes segment profit to be a useful measure for investors, as it reflects the results of segment performance over which management has direct control and is used by management in its evaluation of segment performance. See Note 14.
Lasers revenue decreased $74 million year-over-year due to lower demand in the life sciences vertical in the instrumentation market and to lower demand in the precision manufacturing and semiconductor and display capital equipment verticals in the industrial end market. Gross margin.
Lasers revenue decreased $74 million from fiscal 2023 due to lower demand in the life sciences vertical in the instrumentation market and to lower demand in the precision manufacturing and semiconductor and display capital equipment verticals in the industrial end market. Gross margin.
Supplemental information pertaining to our sources and uses of cash for the periods indicated is presented as follows: Sources (uses) of Cash (millions): Year Ended June 30, 2024 2023 2022 Net cash provided by operating activities $ 546 $ 634 $ 413 Net proceeds from debt and equity issuances, including noncontrolling interest holders 968 1,358 990 Proceeds from exercises of stock options and purchases of stock under employee stock purchase plan 42 24 18 Proceeds from long-term borrowings and revolving credit facilities 19 3,715 — Payments on Convertible Debt and Finisar Notes — (4) (15) Cash paid for dividends — (28) (35) Debt issuance costs — (127) (10) Purchases of businesses, net of cash acquired — (5,489) — Effect of exchange rate changes on cash and cash equivalents and other items (1) (4) 34 Other investing and financing (5) (5) (8) Payments in satisfaction of employees’ minimum tax obligations (22) (54) (21) Payments on existing debt and revolving credit facilities (248) (1,330) (62) Additions to property, plant & equipment (347) (436) (314) Net cash provided by operating activities: Net cash provided by operating activities was $546 million during the current fiscal year ended June 30, 2024 compared to $634 million of cash provided by operating activities during the same period last fiscal year.
Supplemental information pertaining to our sources and uses of cash for the periods indicated is presented as follows: 43 Sources (uses) of cash (in millions): Year Ended June 30, 2025 2024 2023 Net cash provided by operating activities $ 634 $ 546 $ 634 Net proceeds from debt and equity issuances, including noncontrolling interest holders — 968 1,358 Proceeds from exercises of stock options and purchases of stock under employee stock purchase plan 50 42 24 Proceeds from long-term borrowings and revolving credit facilities 54 19 3,715 Proceeds from the sale of business 27 — — Payments on Convertible Debt and Finisar Notes — — (4) Cash paid for dividends (11) — (28) Debt issuance costs — — (127) Purchases of businesses, net of cash acquired — — (5,489) Effect of exchange rate changes on cash and cash equivalents and other items 76 (1) (4) Other investing and financing (1) (5) (5) Payments in satisfaction of employees’ minimum tax obligations (54) (22) (54) Payments on existing debt and revolving credit facilities (489) (248) (1,330) Additions to property, plant & equipment (441) (347) (436) Net cash provided by operating activities: Net cash provided by operating activities was $634 million during the current fiscal year ended June 30, 2025 compared to $546 million of cash provided by operating activities during the same period last fiscal year.
Our cash position, borrowing capacity and debt obligations are as follows (in millions): June 30, 2024 June 30, 2023 Cash and cash equivalents $ 926 $ 821 Restricted cash, current 174 12 Restricted cash, non-current 690 4 Available borrowing capacity under Revolving Credit Facility 346 348 Total debt obligations 4,100 4,310 Other Liquidity On December 4, 2023, the Company consummated two investment agreements under which Silicon Carbide LLC, a Company subsidiary, received $1.0 billion cash in exchange for 25% of the equity of that entity.
Our cash position, borrowing capacity and debt obligations are as follows (in millions): June 30, 2025 June 30, 2024 Cash and cash equivalents $ 909 $ 926 Restricted cash, current 9 174 Restricted cash, non-current 715 690 Available borrowing capacity under Revolving Credit Facility 315 346 Total debt obligations 3,687 4,100 Other Liquidity On December 4, 2023, the Company completed two investment agreements under which Silicon Carbide LLC, a Company subsidiary, received $1.0 billion cash in exchange for 25% of the equity of that entity.
On July 1, 2023, our interest rate cap became effective, which together with our interest rate swap, reduced interest expense by $45 million during the fiscal year ended June 30, 2024. During the fiscal year ended June 30, 2024, the Company made payments of $225 million for the Term Facilities, including voluntary prepayments of $155 million.
On July 1, 2023, our interest rate cap became effective, which together with our interest rate swap (through September 30, 2024), reduced interest expense by $32 million during the fiscal year ended June 30, 2025. During the fiscal year ended June 30, 2025, the Company made payments of $433 million for the Term Facilities, including voluntary prepayments of $400 million.
Included in Interest and other, net, were interest expense on borrowings, Merger financing fees, foreign currency gains and losses, amortization of debt issuance costs, equity gains and losses from unconsolidated investments, and interest income on excess cash balances.
Included in Interest and other, net, were interest expense on borrowings, foreign currency gains and losses, amortization of debt issuance costs, equity gains and losses from unconsolidated investments, interest and dividend income on excess cash balances and income from an insurance settlement.
The decrease in revenues of $45 million during fiscal 2024 was primarily due to decreased volumes year-over-year in the telecom vertical as our communications service provider customers continue to work down their inventory levels with reduced capital spending, partially offset by increases in the datacom vertical driven by increased AI-related datacom transceivers shipments, both within the communications market.
The decrease in revenues of $45 million during fiscal 2024 was primarily due to decreased volumes year-over-year in the telecom vertical as our communications service provider customers continue to work down their inventory levels with reduced capital spending, partially offset by increases in the datacom vertical driven by increased AI-related datacom transceivers shipments, both within the communications market. 42 Segment profit for the year ended June 30, 2024 for Networking decreased 24% to $354 million, compared to segment profit of $465 million for fiscal year 2023.
Goodwill and Other Intangible Assets to the Company’s Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information).
Assets Held-for-Sale to the Company’s Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information.
Internal research and development (“IR&D”) expenses for the fiscal year ended June 30, 2024 were $479 million, or 10% of revenues, compared to $500 million, or 10% of revenues, last fiscal year.
Research and development. R&D expenses for the fiscal year ended June 30, 2024 were $479 million, or 10% of revenues, compared to $500 million, or 10% of revenues, for fiscal 2023.
The Term A Facility and the Revolving Credit Facility borrowings bear interest at adjusted SOFR plus 2.00% as of June 30, 2024.
The Term A Facility and the Revolving Credit Facility borrowings bear interest at adjusted SOFR plus 1.85% as of June 30, 2025.
Coherent’s MD&A is presented in the following sections: • Forward-Looking Statements • Overview • Restructuring and Site Consolidation • Silicon Carbide Investment • Critical Accounting Policies and Estimates • Conversion of Series A Preferred Stock • Fiscal Year 2024 Compared to Fiscal Year 2023 • Fiscal Year 2023 Compared to Fiscal Year 2022 • Liquidity and Capital Resources • Off Balance Sheet Arrangements Forward-looking statements in Item 7 may involve risks and uncertainties that could cause results to differ materially from those projected (refer to Item 1A for discussion of these risks and uncertainties).
Coherent’s MD&A is presented in the following sections: • Overview • Trends and Other Matters Affecting our Business • Critical Accounting Policies and Estimates • Fiscal Year 2025 Compared to Fiscal Year 2024 • Fiscal Year 2024 Compared to Fiscal Year 2023 • Liquidity and Capital Resources • Off Balance Sheet Arrangements Forward-looking statements in Item 7 may involve risks and uncertainties that could cause results to differ materially from those projected (refer to Item 1A for discussion of these risks and uncertainties).
Fiscal Year 2024 Compared to Fiscal Year 2023 The Company reports its financial results in the following three designated segments: (i) Networking, (ii) Materials, and (iii) Lasers. 52 The following table sets forth select items from our Consolidated Statements of Earnings (Loss) for the years ended June 30, 2024 and 2023 ($ in millions except per share information) (1) : Year Ended June 30, 2024 Year Ended June 30, 2023 % of Revenues % of Revenues Total revenues $ 4,708 100 % $ 5,160 100 % Cost of goods sold 3,252 69 3,542 69 Gross margin 1,456 31 1,618 31 Operating expenses: Internal research and development 479 10 500 10 Selling, general and administrative 854 18 1,037 20 Restructuring charges 27 1 119 2 Interest and other, net 244 5 318 6 Loss before income taxes (148) (3) (356) (7) Income Tax Benefit 11 — (96) (2) Net loss (159) (3) (259) (5) Net loss attributable to noncontrolling interests (3) — % — — % Net loss attributable to Coherent Corp. $ (156) (3) % $ (259) (5) % Diluted loss per share $ (1.84) $ (2.93) (1) Some amounts may not add due to rounding.
The higher segment profit was driven by favorable product mix, higher revenue volumes, improvements in pricing optimization and lower manufacturing costs and SG&A expenses. 40 Fiscal Year 2024 Compared to Fiscal Year 2023 The following table sets forth select items from our Consolidated Statements of Earnings (Loss) for the years ended June 30, 2024 and 2023 ($ in millions except per share information) (1) : Year Ended Year Ended June 30, 2024 June 30, 2023 % of Revenues % of Revenues Total revenues $ 4,708 100 % $ 5,160 100 % Cost of goods sold 3,252 69 3,542 69 Gross margin 1,456 31 1,618 31 Operating expenses: Research and development 479 10 500 10 Selling, general and administrative 854 18 1,037 20 Restructuring charges 27 1 119 2 Interest and other, net 244 5 318 6 Loss before income taxes (148) (3) (356) (7) Income tax expense (benefit) 11 — (96) (2) Net loss (159) (3) (259) (5) Net loss attributable to noncontrolling interests (3) — — — Net loss attributable to Coherent Corp. $ (156) (3) % $ (259) (5) % Diluted loss per share $ (1.84) $ (2.93) (1) Some amounts may not add due to rounding.
Net cash provided by financing activities was $3.6 billion for the year ended June 30, 2023 compared to net cash provided by financing activities of $863 million for the year ended June 30, 2022.
Net cash provided by financing activities was $758 million for the year ended June 30, 2024 compared to net cash provided by financing activities of $3,554 million for the year ended June 30, 2023.
The Organization for Economic Co-operation and Development (“OECD”), a global policy forum, introduced a framework to implement a global minimum tax of 15% which would apply to multinational corporations, referred to as Pillar Two.
The OECD, a global policy forum, introduced a framework to implement a global minimum tax of 15% which would apply to multinational corporations, referred to as Pillar Two.
The decrease in cash flows provided by operating activities during the year ended June 30, 2024 compared to the same period last fiscal year was primarily due to lower non-cash adjustments partially offset by lower losses. Net cash provided by operating activities was $634 million and $413 million for the fiscal years ended June 30, 2023 and 2022, respectively.
The decrease in cash flows provided by operating activities during the fiscal year ended June 30, 2024 compared to the fiscal year ended June 30, 2023 was primarily due to lower non-cash adjustments partially offset by lower losses.
In fiscal 2023, these activities resulted in $119 million of charges primarily for employee termination costs, and the write-off of property and equipment, net of $65 million from reimbursement arrangements. We expect the restructuring actions to be substantially completed by the end of fiscal 2025.
In fiscal 2025, these activities resulted in $107 million of charges primarily for the write-off of property and equipment and ROU assets, employee and contract termination costs. We expect the restructuring actions to be substantially completed by the 35 end of fiscal 2026.
The decrease was primarily due to $56 million lower shipments to the instrumentation market, primarily in the life sciences vertical where we see continued inventory digestion by our customers, and an $18 million drop in the industrial market as a result of lower volumes in our precision manufacturing and display capital equipment verticals due to macroeconomic conditions, partially offset by higher volumes in our semiconductor capital equipment display vertical. 55 Operating loss for the fiscal year ended June 30, 2024 for Lasers decreased 65%, with operating loss of $146 million in the current year, compared to operating loss of $419 million last fiscal year.
The decrease was primarily due to $56 million lower shipments to the instrumentation market, primarily in the life sciences vertical where we saw continued inventory digestion by our customers, and an $18 million drop in the industrial market as a result of lower volumes in our precision manufacturing and display capital equipment verticals due to macroeconomic conditions, partially offset by higher volumes in our semiconductor capital equipment display vertical.
Materials ($ in millions) Year Ended June 30, % Decrease 2024 2023 Revenues $ 1,017 $ 1,350 (25) % Operating income $ 63 $ 160 (61) % Revenues for the fiscal year ended June 30, 2024 for Materials decreased 25% to $1,017 million, compared to revenues of $1,350 million last fiscal year.
Materials ($ in millions) Year Ended June 30, % Decrease 2024 2023 Revenues $ 1,017 $ 1,350 (25) % Segment profit $ 297 $ 392 (24) % Revenues for the fiscal year ended June 30, 2024 for Materials decreased 25% to $1,017 million, compared to revenues of $1,350 million for fiscal year 2023.
Lasers ($ in millions) Year Ended June 30, % Decrease 2024 2023 Revenues $ 1,395 $ 1,469 (5) % Operating income $ (146) $ (419) (65) % Revenues for the fiscal year ended June 30, 2024 for Lasers decreased 5% to $1,395 million, compared to revenues of $1,469 million last fiscal year.
Lasers ($ in millions) Year Ended June 30, % Decrease 2024 2023 Revenues $ 1,395 $ 1,469 (5)% Segment profit $ 207 $ 271 (24)% Revenues for the fiscal year ended June 30, 2024 for Lasers decreased 5% to $1,395 million, compared to revenues of $1,469 million for fiscal 2023.
Restructuring charges related to our Restructuring Plan for the year ended June 30, 2023 were $119 million, or 2% of revenues, and consist of severance and equipment write-offs, net of reimbursements, due to the consolidation of certain manufacturing sites. See Note 22.
Restructuring charges related to our 2023 Restructuring Plan for the year ended June 30, 2024 were $27 million, or 1% of revenues, and consisted primarily of severance, accelerated depreciation, equipment write-offs and move costs due to the consolidation of certain manufacturing sites. See Note 20.
Cash inflow for fiscal 2023 was from borrowings under the New Term Facilities, defined below, as well the net proceeds from the issuance of Coherent’s Series B-2 Convertible Preferred Stock.
Cash inflows for fiscal 2023 were from borrowings under the New Term Facilities, defined below, as well the net proceeds from the issuance of Coherent’s Series B-2 Convertible Preferred Stock. Financing outflows included payments to settle the Company’s existing senior credit facilities.
Restructuring Plan to the Company’s Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information. Interest and other, net. Interest and other, net for the year ended June 30, 2023 was expense of $318 million compared to expense of $132 million in fiscal 2022, an increase of $186 million.
Assets Held-for-Sale to the Company’s Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information. Interest and other, net. Interest and other, net for the year ended June 30, 2025 was expense of $196 million compared to expense of $244 million last fiscal year, a decrease of $48 million.
Net cash used in investing activities: Net cash used in investing activities was $0.4 billion for the fiscal year ended June 30, 2024, compared to net cash used of $5.9 billion for the same period last fiscal year. In fiscal 2023, $5.5 billion was used to fund the Merger. Cash used to fund capital expenditures decreased by $89 million year-over-year.
Higher cash used to fund capital expenditures of $94 million year-over-year was partially offset by $27 million cash received from the sale of a business. Net cash used in investing activities was $0.4 billion and $5.9 billion for the fiscal years ended June 30, 2024 and 2023, respectively. In fiscal 2023, $5.5 billion was used to fund the Merger.
Excluding the lower Merger related costs, operating income for fiscal 2024 decreased $39 million primarily due to lower revenues and lower gross margin percentage, due to less favorable mix within the industrial and instrumentation markets, the unfavorable impact of fixed manufacturing costs with lower revenues and higher inventory provisions.
The lower segment profit was driven by lower revenues and lower gross margin percentage, due to less favorable mix within the industrial and instrumentation markets, the unfavorable impact of fixed manufacturing costs with lower revenues and higher inventory provisions.
Segment and Geographic Reporting to the Company’s Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information on the Company’s reportable segments and for the reconciliation of operating income to net earnings, which is incorporated herein by reference. 54 Networking ($ in millions) Year Ended June 30, % Decrease 2024 2023 Revenues $ 2,296 $ 2,341 (2) % Operating income $ 179 $ 222 (20) % Revenues for the year ended June 30, 2024 for Networking decreased 2% to $2,296 million, compared to $2,341 million for last fiscal year.
Segment and Geographic Reporting to the Company’s Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information on the Company’s reportable segments and for the reconciliation of the Company’s segment profit to earnings (loss) before income taxes, which is incorporated herein by reference.
The Equity Investments in Silicon Carbide enables Coherent to increase its available free cash flow to provide greater financial and operational flexibility to execute its capital allocation priorities, as the aggregate $1 billion investment will be used to fund future capital expansion of Silicon Carbide. See Note 12.
Such funds have and will continue to be used primarily to fund future capital expansion in our silicon carbide business and will enable us to increase our available free cash flow to provide greater financial and operational flexibility to execute our capital allocation priorities. See Note 11.
In addition, as of June 30, 2024, we had obligations under our operating leases of approximately $258 million, $52 million of which will be paid in the fiscal year 2025. 61
Contractual Obligations As of June 30, 2025, in the ordinary course of business, we had total estimated purchase commitments from vendors of approximately $1,092 million. In addition, as of June 30, 2025, we had obligations under our operating leases of approximately $263 million, $58 million of which will be paid in the fiscal year 2026. 46
Operating income for the fiscal year ended June 30, 2024 for Materials decreased 61%, with operating income of $63 million in the current year, compared to operating income of $160 million last fiscal year.
Segment profit for the fiscal year ended June 30, 2025 for Materials increased 19%, with segment profit of $355 million in the current year, compared to segment profit of $297 million last fiscal year.
Restructuring and Site Consolidation Restructuring Plan On May 23, 2023, the Board of Directors approved the Company’s May 2023 Restructuring Plan which includes site consolidations, facilities moves and closures, as well as the relocation and requalification of certain manufacturing facilities.
Restructuring Plans 2023 Plan On May 23, 2023, the Board of Directors approved the 2023 Plan which includes site consolidations, facilities moves and closures, as well as the relocation and requalification of certain manufacturing facilities. These restructuring actions were intended to realign our cost structure as part of a transformation to a simpler, more streamlined, resilient and sustainable business model.
Other sources of cash include proceeds from the issuance of equity, proceeds received from the exercises of stock options, and sale of equity investments and businesses.
Liquidity and Capital Resources Historically, our primary sources of cash have been provided from operations, long-term borrowings, and advance funding from customers. Other sources of cash include proceeds from the issuance of equity, proceeds received from the exercises of stock options, and sale of equity investments and businesses.
Cash used to fund capital expenditures increased by $122 million during the fiscal year ended June 30, 2023 compared to the fiscal year ended June 30, 2022, to continue to increase capacity to meet the growing demand for our product portfolio.
Cash used to fund capital expenditures decreased by $89 million during the fiscal year ended June 30, 2024 compared to the fiscal year ended June 30, 2023.
Net cash provided by financing activities: Net cash provided by financing activities was $0.8 billion for the fiscal year ended June 30, 2024, compared to net cash provided by financing activities of $3.6 billion for the same period last fiscal year.
Net cash used in investing activities: Net cash used in investing activities was $414 million for the fiscal year ended June 30, 2025, compared to net cash used of $351 million for the same period last fiscal year.
However, the actual timing and costs associated with these restructuring actions may differ from our current expectations and estimates and such differences may be material. See Note 22. Restructuring Plan to the Company’s Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information.
However, the actual timing and costs associated with these restructuring actions may differ from our current expectations and estimates and such differences may be material.
Noncontrolling Interests 50 included in Item 8 of this Annual Report on Form 10-K for further information on the noncontrolling interests in our Silicon Carbide subsidiary.
Restructuring Plans to the Company’s Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information. Impairment of assets held-for-sale.
Operating income for the fiscal year ended June 30, 2023 for Materials decreased 27%, with operating income of $160 million in fiscal 2023, compared to operating income of $219 million for fiscal year 2022.
Segment profit for the fiscal year ended June 30, 2024 for Lasers decreased 24%, with segment profit of $206.8 million in the current year, compared to segment profit of $270.6 million for fiscal 2023.
Net cash used in investing activities was $5.9 billion and $320 million for the fiscal years ended June 30, 2023 and 2022, respectively. In fiscal 2023, $5.5 billion was used to fund the Merger.
Net cash provided by operating activities was $546 million and $634 million for the fiscal years ended June 30, 2024 and 2023, respectively.
Fiscal Year 2023 Compared to Fiscal Year 2022 The following table sets forth select items from our Consolidated Statements of Earnings (Loss) for the years ended June 30, 2023 and 2022 ($ in millions except per share information) (1) : Year Ended Year Ended June 30, 2023 June 30, 2022 % of Revenues % of Revenues Total revenues $ 5,160 100 % $ 3,317 100 % Cost of goods sold 3,542 69 2,051 62 Gross margin 1,618 31 1,265 38 Operating expenses: Internal research and development 500 10 377 11 Selling, general and administrative 1,037 20 474 14 Restructuring charges 119 2 — — Interest and other, net 318 6 132 4 Earnings (loss) before income tax (356) (7) 282 8 Income tax (expense) benefit (96) (2) 47 1 Net earnings (loss) $ (259) (5) % $ 235 7 % Diluted earnings (loss) per share $ (2.93) $ 1.45 (1) Some amounts may not add due to rounding.
Fiscal Year 2025 Compared to Fiscal Year 2024 The Company reports its financial results in the following three designated segments: (i) Networking, (ii) Materials, and (iii) Lasers. 37 The following table sets forth select items from our Consolidated Statements of Earnings (Loss) for the years ended June 30, 2025 and 2024 ($ in millions except per share information) (1) : Year Ended June 30, 2025 Year Ended June 30, 2024 % of Revenues % of Revenues Total revenues $ 5,810 100 % $ 4,708 100 % Cost of goods sold 3,767 65 3,252 69 Gross margin 2,043 35 1,456 31 Operating expenses: Research and development 582 10 479 10 Selling, general and administrative 926 16 854 18 Restructuring charges 160 3 27 1 Impairment of assets held-for-sale 85 1 — — Interest and other, net 196 3 244 5 Earnings (loss) before income taxes 94 2 (148) (3) Income tax expense 64 1 11 — Net earnings (loss) 30 1 (159) (3) Net loss attributable to noncontrolling interests (19) — (3) — Net earnings (loss) attributable to Coherent Corp. $ 49 1 % $ (156) (3) % Diluted earnings (loss) per share $ (0.52) $ (1.84) (1) Some amounts may not add due to rounding.
In fiscal 2023, the acceleration of these activities resulted in $20 million in charges primarily for employee termination costs, the write-off of inventory for products that have been exited and shut down costs. Silicon Carbide Investment On May 10, 2023, the Company announced that it had commenced a review of strategic alternatives for its Silicon Carbide business.
In fiscal 2023, the acceleration of these activities resulted in $20 million in charges primarily for employee termination costs, the write-off of inventory for products that have been exited and shut down costs. Impairment of Assets Held-for-Sale In the fourth quarter of fiscal 2025, management entered into non-binding agreements to sell several entities.
Selling, general and administrative (“SG&A”) expenses for the year ended June 30, 2023 were $1,037 million, or 20% of revenues, compared to $474 million, or 14% of revenues, in fiscal year 2022.
We continue to focus on investing our R&D in those projects with the highest return-on-investment. Selling, general and administrative. Selling, general and administrative (“SG&A”) expenses for the year ended June 30, 2025 were $926 million, or 16% of revenues, compared to $854 million, or 18% of revenues, last fiscal year.
The increase in cash flows provided by operating activities during the fiscal year ended June 30, 2023 compared to the fiscal year ended June 30, 2022 was driven by improved management of working capital accounts.
The increase in cash flows provided by operating activities during the year ended June 30, 2025 compared to the same period last fiscal year was primarily due to higher earnings partially offset by increases in accounts receivables and inventories as a result of higher revenues.
The difference between our effective tax rate and the U.S. statutory rate of 21% was due to research and development incentives in certain jurisdictions. Segment Reporting Revenues and operating income for our reportable segments are discussed below.
Our effective income tax rate for fiscal 2025 was 68%, compared to an effective tax rate of (8)% last fiscal year. The difference between our effective tax rate and the U.S. statutory rate of 21% was due to tax rate differentials between U.S. and foreign jurisdictions.
Gross margin for the year ended June 30, 2023 was $1,618 million, or 31%, of total revenues, compared to $1,265 million, or 38% of total revenues, for fiscal 2022. Gross margin as a percentage of revenues decreased 680 basis points compared to fiscal 2022.
Materials decreased $63 million year-over-year, primarily due to softness in the Silicon Carbide business. Gross margin. Gross margin for the year ended June 30, 2025 was $2,043 million, or 35%, of total revenues, compared to $1,456 million, or 31% of total revenues, for fiscal 2024, an increase of 424 basis points.
Operating income for the year ended June 30, 2024 for Networking decreased 20% to $179 million, compared to operating income of $222 million last fiscal year. The decrease in operating income for fiscal 2024 was driven by $45 million lower revenues and lower margin percentage partially offset by lower restructuring charges.
The decrease in segment profit for fiscal 2024 was driven by $45 million lower revenues and lower margin percentage.
Materials ($ in millions) Year Ended June 30, % Increase 2023 2022 Revenues $ 1,350 $ 1,119 21 % Operating income $ 160 $ 219 (27) % Revenues for the fiscal year ended June 30, 2023 for Materials increased 21% to $1,350 million, compared to revenues of $1,119 million for fiscal year 2022.
Lasers ($ in millions) Year Ended June 30, % Increase 2025 2024 Revenues $ 1,435 $ 1,395 3 % Segment profit $ 317 $ 207 53 % Revenues for the fiscal year ended June 30, 2025 for Lasers increased 3% to $1,435 million, compared to revenues of $1,395 million last fiscal year.
Generally, cash balances held outside the United States could be repatriated to the United States. 60 At June 30, 2024, we had $864 million of restricted cash, which includes $858 million at our Silicon Carbide LLC that is restricted for use by only that subsidiary.
At June 30, 2025, we had $724 million of restricted cash, which includes $720 million at our Silicon Carbide LLC that is restricted for use by only that subsidiary. 45 Off-Balance Sheet Arrangements We have no off-balance sheet arrangements as defined by Regulation S-K of the Securities Act of 1933.
The decrease in operating income during the current fiscal year was driven by $333 million lower revenues and higher costs for sites being shutdown, partially offset by $33 million lower restructuring charges, primarily severance, related to our Restructuring Plan and $33 million charges in fiscal 2023 for impairment of certain tradename, customer list and technology intangibles.
Segment profit for the fiscal year ended June 30, 2024 for Materials decreased 24%, with segment profit of $297 million in fiscal 2023, compared to segment profit of $392 million for fiscal year 2023. The decrease in segment profit during fiscal 2024 was driven by $333 million lower revenues and higher costs for sites being shutdown.
Internal research and development. IR&D expenses for the fiscal year ended June 30, 2023 were $500 million, or 10% of revenues, compared to $377 million, or 11% of revenues, in fiscal 2022. The increase of $122 million for fiscal 2023 was driven by an additional $132 million of IR&D expenses from the Lasers segment.
Research and development (“R&D”) expenses for the fiscal year ended June 30, 2025 were $582 million, or 10% of revenues, compared to $479 million, or 10% of revenues, last fiscal year. The increase of $103 million for fiscal 2025 was primarily related to continued investment in our product portfolios, particularly in datacom.
The increase in revenues of $144 million during fiscal 2023 was primarily due to increased revenue in the communications market due to stronger demand in telecom and datacom. Operating income for the year ended June 30, 2023 for Networking decreased 4% to $222 million, compared to operating income of $232 million for fiscal year 2022.
The increase in revenues of $1,125 million during fiscal 2025 was primarily due to increased AI datacenter related revenue in our communications market resulting from increased volumes in the datacom vertical and growth in the telecom vertical due to increased demand in data center interconnect and the telecom transport market.
These restructuring actions are expected to be accompanied by other cost reductions and are intended to realign our cost structure as part of a transformation to a simpler, more streamlined, resilient and sustainable business model. In fiscal 2024, these activities resulted in charges of $27 million, primarily for accelerated depreciation, the write-off of property and equipment, and site move costs.
In fiscal 2024, these activities resulted in charges of $27 million, primarily for accelerated depreciation, the write-off of property and equipment, and site move costs. In fiscal 2023, these activities resulted in $119 million of charges primarily for employee termination costs, and the write-off of property and equipment, net of $65 million from reimbursement arrangements. See Note 20.
Segment and Geographic Reporting to the Company’s Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information on the Company’s reportable segments and for the reconciliation of operating income to net earnings, which is incorporated herein by reference. 57 Networking ($ in millions) Year Ended June 30, % Increase 2023 2022 Revenues $ 2,341 $ 2,197 7 % Operating income $ 222 $ 232 (4) % Revenues for the year ended June 30, 2023 for Networking increased 7% to $2,341 million, compared to $2,197 million for fiscal year 2022.
Noncontrolling Interests to the Company’s Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for further information. Segment Reporting For a discussion of revenues and segment profit measures, refer to our disclosure under “Segment Reporting” within “Fiscal Year 2025 Compared to Fiscal Year 2024” above.
Consolidated Revenues. Revenues for the year ended June 30, 2023 increased 56% to $5,160 million, compared to $3,317 million for fiscal 2022. The biggest driver of increased revenue relates to the Lasers segment, which was acquired as part of the Merger.
Consolidated Revenues. Revenues for the year ended June 30, 2025 increased 23% to $5,810 million, compared to $4,708 million for the prior fiscal year.
Removed
Forward-Looking Statements Certain statements contained in this MD&A are forward-looking statements as defined by Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding projected growth rates, markets, product development, financial position, capital expenditures and foreign currency exposure. Forward-looking statements are also identified by words such as “expects,” “anticipates,” “believes,” “intends,” “plans,” “projects” or similar expressions.
Added
Overview For an overview of our business, see Part I - Item 1. Business - General Description of Business of this Annual Report on Form 10-K for further information. Trends and Other Matters Affecting our Business Industry Conditions Throughout fiscal 2025, we experienced stronger demand in our Communications market.
Removed
Although our management considers these expectations and assumptions to have a reasonable basis, there can be no assurance that management’s expectations, beliefs or projections as expressed in the forward-looking statements will actually occur or prove to be correct.
Added
The increase in the number of hyperscale and other cloud customers building AI datacenters and in the number and size of their AI datacenter buildouts drove demand for our datacenter transceivers. Strong demand for our new ZR/ZR+ transceiver products along with growing demand for traditional telecom transport products drove increased volumes for our telecom and other communications solutions.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Interest Rate Risk As of June 30, 2024, our total borrowings include variable rate borrowings, which expose us to changes in interest rates.
Interest Rate Risk As of June 30, 2025, our total borrowings include variable rate borrowings, which expose us to changes in interest rates.
In November 2019, we entered into an interest rate swap contract, amended on March 20, 2023, to limit the exposure of our variable interest rate debt by effectively converting a portion of interest payments to fixed interest rate debt.
In November 2019, we entered into an interest rate swap contract, amended on March 20, 2023, to limit the exposure of our variable interest rate debt by effectively converting a portion of interest payments to fixed interest rate debt. The interest rate swap expired on September 24, 2024.
In the normal course of business, we use a variety of techniques and derivative financial instruments as part of our overall risk management strategy, which is primarily focused on our exposure in relation to the Chinese Renminbi, Euro, Swiss Franc, Japanese Yen, Singapore Dollar and Korean Won. No significant changes have occurred in the techniques and instruments used.
In the normal course of business, we have the option to use a variety of techniques and derivative financial instruments as part of our overall risk management strategy, which is primarily focused on our exposure in relation to the Chinese Renminbi, Euro, Swiss Franc, Japanese Yen, Singapore Dollar and Korean Won.
If we had not effectively hedged our variable rate debt, a change in the interest rate of 100 basis points on these variable rate borrowings would have resulted in additional interest expense of $33 million for the year ended June 30, 2024. 62
If we had not effectively hedged our variable rate debt, a change in the interest rate of 100 basis points on these variable rate borrowings would have resulted in additional interest expense of $30 million for the year ended June 30, 2025. 47
On February 23, 2022, we entered into an interest rate cap (the “Cap”), amended on March 20, 2023, with an effective date of July 1, 2023.
On February 23, 2022, we entered into an interest rate cap (the “Cap”), amended on March 20, 2023, with an effective date of July 1, 2023. On September 1, 2024, we increased the notional amount from $500 million to $1,500 million.
Added
As of September 30, 2024, after weighing the costs and benefits of hedging foreign exchange risks on our global balance sheets, we paused our balance sheet hedging program indefinitely. We continue to analyze these risks and the costs and benefits inherent in a hedging program.

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