Coherent (COHR) Squeezes Key Optical Network Gear Into a Plug-In Module

On September 17, Coherent Corp. unveiled an upgraded Pluggable Optical Line System that integrates extensive optical network capabilities into a compact QSFP module. This new system supports 32 wavelengths across a single pair of fibers, providing up to 25.6Tbps of traffic for links spanning 2km to 200km. The system, designed for 800G coherent optics, automates link configuration and laser safety management, reducing the need for manual setup.

The product is already in high-volume production for both 400G and 800G versions, compatible with existing network setups. Coherent's telecom transport unit head, Madhu Krishnaswamy, highlights the objective of balancing performance and operational simplicity. The company's financial performance was strong, with revenue of $2.05 billion in its fourth quarter, representing a 34% increase from the previous year.

Non-GAAP earnings per share reached $1.74, compared to $1.00 a year ago, with CEO Jim Anderson projecting first-quarter fiscal 2027 revenue of $2.2 billion to $2.4 billion. However, the company's profit figures under different accounting standards differ, with non-GAAP earnings at $1.74 per share and GAAP earnings at $1.19. Operating margins are notably higher on a non-GAAP basis at 21.8% compared to 12.4% under GAAP.

Investors are paying a forward P/E of 31.25 for Coherent's growth prospects, despite a reduction in hedge fund holdings and a short interest of 6.44% of the float. The company's strategic shift towards optical links in AI data centers aligns with rising demand for these technologies.