Coherent is a global leader in photonics, and the question for the next twelve months is whether the company can convert the Q4 FY2026 revenue of $2.05 billion up 34% year over year and 42% year over year on a pro forma basis, the Q4 FY2026 GAAP gross margin of 38.5% up 277 basis points, the Q4 FY2026 non-GAAP gross margin of 40.2% up 215 basis points, the Q4 FY2026 GAAP EPS of $1.19 up $2.02, the Q4 FY2026 non-GAAP EPS of $1.74 up $0.74, the FY2026 record revenue of $7.118 billion up 22.5%, the FY2026 operating margin of 12.6% up 762 basis points, the AI datacenter transition from copper to optical connectivity, the expanding production capacity, the multiple new growth platforms beginning to ramp, and the broad photonic technology portfolio and manufacturing scale into the kind of AI-Datacenter-Optical and Photonics-Platform operating leverage the company has been telegraphing. The Q4 FY2026 print was the cleanest test of that thesis, and the cleanest signal is that CEO Jim Anderson said "fiscal 2026 was an outstanding year for Coherent, with record revenue, significant margin expansion, and non-GAAP EPS growth that was more than twice the rate of revenue growth. We enter fiscal 2027 with exceptional customer demand, expanding production capacity, and multiple new growth platforms beginning to ramp. As AI datacenter architectures increasingly transition from copper to optical connectivity, we believe Coherent's broad photonic technology portfolio and manufacturing scale uniquely position us to deliver accelerating growth and capitalize on this multi-year opportunity." The strategic tension is the 1,202 basis points operating margin expansion against the 22.7% Q4 FY2026 non-GAAP operating expense growth, and the forward question is whether the AI datacenter transition from copper to optical connectivity can compound the multiple new growth platforms into the fiscal 2027 acceleration the company has been telegraphing.
The $2.05 billion Q4 FY2026 revenue and the 34% year over year revenue growth are the cleanest read on the operating momentum, and the AI datacenter transition from copper to optical connectivity is the proof. The Q4 FY2026 revenue of $2.05 billion grew 34% year over year and 42% year over year on a pro forma basis. The FY2026 revenue of $7.118 billion grew 22.5% year over year.
The Q4 FY2026 GAAP gross margin of 38.5% was 277 basis points above the prior-year quarter, the Q4 FY2026 non-GAAP gross margin of 40.2% was 215 basis points above the prior-year quarter, the FY2026 GAAP gross margin of 37.5% was 233 basis points above the prior-year period, the FY2026 non-GAAP gross margin of 39.4% was 152 basis points above the prior-year period, the Q4 FY2026 GAAP operating income of $254 million was 26.5% above the prior-quarter and 4,063.9% above the prior-year quarter, the Q4 FY2026 GAAP operating margin of 12.4% was 1,202 basis points above the prior-year quarter, the Q4 FY2026 non-GAAP operating income of $446 million was 21.8% above the prior-quarter and 62.1% above the prior-year quarter, the Q4 FY2026 non-GAAP operating margin of 21.8% was 381 basis points above the prior-year quarter, the FY2026 GAAP operating income of $898 million was 209.7% above the prior-year period, the FY2026 non-GAAP operating income of $1.457 billion was 40.5% above the prior-year period, the FY2026 non-GAAP operating margin of 20.5% was 262 basis points above the prior-year period, the Q4 FY2026 GAAP net earnings of $241 million, the Q4 FY2026 GAAP diluted EPS of $1.19 up $2.02 year over year, the Q4 FY2026 non-GAAP net earnings of $351 million up 82.7% year over year, the Q4 FY2026 non-GAAP diluted EPS of $1.74 up $0.74 year over year, the FY2026 GAAP net earnings of $805 million up 1,530.8% year over year, the FY2026 GAAP diluted EPS of $4.12 up $4.64 year over year, the FY2026 non-GAAP net earnings of $1.097 billion up 58.3% year over year, and the FY2026 non-GAAP diluted EPS of $5.61 up $2.08 year over year anchor the print. The forward question is whether the AI datacenter transition from copper to optical connectivity can compound the multiple new growth platforms into the fiscal 2027 acceleration.