Coherent shares fell 8.1% to $327.18 at the latest close. The annual numbers show Coherent’s AI-infrastructure exposure alongside a sharp decline in operating cash flow.
Revenue rose 22.5% to $7.1 billion in the twelve months ended June 30, while net income jumped to $805.0 million from $49.4 million. Operating cash flow went the other way, dropping from $633.6 million to $79.5 million.
That is the central tension in Coherent’s 10-K: the business is scaling quickly, but the cash needed to support that growth scaled faster. Inventory rose 79.5% to $2.6 billion, accounts receivable climbed 39.3% to $1.3 billion, and capital spending reached $1.1 billion, up 150.2%.
Management ties the sales growth to the part of the company serving AI infrastructure. Datacenter and Communications revenue rose 40.5% to $5.27 billion. Industrial revenue fell 10.3% to $1.84 billion, leaving the company’s growth concentrated in the larger line.
The company describes the demand behind that increase plainly:
"The increase in revenues of $1,519 million during fiscal 2026 was primarily driven by growth in our Datacenter business reflecting continued strong AI datacenter demand, driven primarily by transceivers, as well as higher Communications business volumes due to increased demand for datacenter interconnect, scale across and traditional telecom applications."
10-K 2026-08-14
The takeaway is not subtle: Coherent sold more into datacenter and communications markets, especially transceivers, while the industrial business contracted. The new sales came with a much larger working-capital bill.
Coherent says the cash decline came from inventory, rather than leaving the cause mysterious:
"The decrease was primarily driven by a significant increase in inventory levels to support higher revenue growth, resulting in increased use of working capital."
10-K 2026-08-14; revenue, cash liquidity
That explanation makes the balance-sheet movement part of the operating story. Cash still rose 27.8% to $1.2 billion, but the increase came alongside a 26.3% rise in diluted shares, from 154.8 million to 195.4 million. More cash is sitting on the balance sheet, while more capital is tied up in inventory and more shares divide the result.
Profitability improved sharply on paper. Net margin rose from 0.8% to 11.3%, helped by pricing optimization, lower manufacturing costs, product mix, and cost reductions. Coherent also says higher legal, integration, divestiture-related consulting, facility-exit, and compensation costs were partly offset by those efficiencies.
The company’s disclosed relationship with NVIDIA adds context to the capacity push, without answering how quickly the spending converts back into cash:
"Agreements with NVIDIA On March 2, 2026, the Company entered into a multi-year strategic agreement with NVIDIA to advance the development of advanced optics technologies, including manufacturing capacity and research and development, to enable next-generation AI infrastructure."
10-K 2026-08-14; disclosed_by_company
The open loop is inventory. Coherent’s next quarterly report will give readers the next reported number to compare with the $2.6 billion sitting there now, alongside operating cash flow.
Source: Coherent Corp. fiscal 2026 Form 10-K filed August 14, 2026.