Slide 1: Investor Presentation August 2024
INVESTOR PRESENTATION August 2024 Copyright 2024, Coherent. All rights reserved. 1
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements relating to future events and expectations, including our expectations reg arding (i) our future financial and operational results; (ii) the growth and megatrends in the markets we serve including industrial, communicat
Slide 3: Coherent at a Glance
FROM A FOUNDATION OF MATERIALS AND IMAGINATION, COHERENT AT WE ENABLE EXCITING MEGATRENDS A GLANCE 1971 Year Founded COHR NYSE ≈26,000 $4.7B FY24 Employees(1) Revenue Available 2,250+ Research & Development(1) $64B Market (CY2023) 3,100+ Patents(1) 126 Locations VERTICAL Materials, Components, INTEG
Slide 4: $4.7 Billion of Revenue in FY24, Well Diversified
$4.7 BILLION OF REVENUE IN FY24 WELL DIVERSIFIED ACROSS TECHNOLOGY, PRODUCTS, AND GEOGRAPHIC MARKETS Segments Markets Regions Communications North Materials America Europe Industrial Lasers 15% 29% 22% 36% BY REPORTING 48% BY MARKET BY REGION (1) 13% China SEGMENT 56% 13% 8% 49% 3% Korea & Japan 8%
Slide 5: Four Attractive Growth Markets, Aggregate $64B TAM
FOUR ATTRACTIVE GROWTH MARKETS AGGREGATE $64B TAM 14% FIVE-YEAR CAGR (2023-28) INDUSTRIAL COMMUNICATIONS ELECTRONICS INSTRUMENTATION TAM: $22B TAM: $23B TAM: $14B TAM: $5B CAGR: 9% CAGR: 14% CAGR: 20% CAGR: 8% Sources: Optech Consulting, Sources: LightCounting, Omdia, Sources: IDC, Morgan Stanley, S
Slide 6: Industrial
INDUSTRIAL MARKET VERTICALS AND MEGATRENDS PRODUCTS VALUE PROPOSITION Precision manufacturing ▪ Fiber lasers for laser welding of batteries ▪ 50 years of experience in laser technology ▪ Giga factories for EV battery processing ▪ UV lasers for OLED manufacturing ▪ Long term technology partner across
Slide 7: Communications
COMMUNICATIONS MARKET VERTICALS AND MEGATRENDS PRODUCTS VALUE PROPOSITION Datacom ▪ 100 to 800 Gbps datacom transceivers ▪ Largest supplier of optical communications ▪ Increasing spend on cloud infrastructure components ▪ Pluggable coherent transceivers ▪ Artificial Intelligence/Machine Learning ▪ V
Slide 8: Datacom Market Is Inflecting, Thanks to the AI Boom
DATACOM MARKET IS INFLECTING, THANKS TO THE AI BOOM Datacom transceivers $M $14,000 Expect Long $12,000 800G/1.6T overlapping 3.2T to dominate for cycles $10,000 next 5 years 1.6T $8,000 800G 400G $6,000 200G $4,000 100G Fast rise, “Annuity” slow decay model of ROI $2,000 $- 2018 2019 2020 2021 2022
Slide 9: Electronics
ELECTRONICS MARKET VERTICALS AND MEGATRENDS PRODUCTS VALUE PROPOSITION Consumer electronics ▪ GaAs and InP optoelectronics ▪ Broadest portfolio of optoelectronics, optics, ▪ Advanced sensing and electronics ▪ VCSELs and edge-emitting lasers ▪ AR/VR ▪ High-volume consumer electronics ▪ Laser illumina
Slide 10: Instrumentation
INSTRUMENTATION MARKET VERTICALS AND MEGATRENDS PRODUCTS VALUE PROPOSITION Life Sciences ▪ Materials, optics, lasers, ▪ Life sciences (biotechnology, medical, and and thermoelectrics environmental) and scientific segment ▪ Smart healthcare evolution, largely based on solutions technology ▪ Component
Slide 11: Financial Highlights
FINANCIAL HIGHLIGHTS Copyright 2024, Coherent. All rights reserved. 11
Slide 12: FY 2024 Non-GAAP Q4 Earnings Results Highlights
FY 2024 NON-GAAP Q4 EARNINGS RESULTS HIGHLIGHTS Revenue “After meeting with many of our employees and customers, I am more excited today about Coherent’s potential than when I joined two months ago. Coherent is a deeply innovative company with many secular growth opportunities. While we have many st
Slide 13: Quarterly Revenue by Segment
QUARTERLY REVENUE BY SEGMENT REVENUE DISTRIBUTION BY SEGMENT Revenue Distribution (1) Quarterly Revenue by Segment 1,400 1,314 1,205 1,209 1,200 1,131 1,053 1,000 Lasers 27% Materials 21% Revenue ($M) 800 600 FY24 Q4 400 200 0 52% FY23 Q4 FY24 Q1 FY24 Q2 FY24 Q3 FY24Q4 Lasers 333 336 354 351 355 Net
Slide 14: Quarterly Revenue by Market
QUARTERLY REVENUE BY MARKET REVENUE DISTRIBUTION BY MARKET Quarterly Revenue Trend Revenue Distribution (1) 1,400 1,314 1,205 1,209 1,131 1,200 1,053 Industrial Revenue ($M) 1,000 Instrumentation 33% 800 8% 600 Electronics 8% 400 FY24 Q4 200 0 FY23 Q4 FY24 Q1 FY24 Q2 FY24 Q3 FY24 Q4 Instrumentation
Slide 15: Quarterly Revenue by Region
QUARTERLY REVENUE BY REGION REVENUE DISTRIBUTION BY REGION Quarterly Revenue Trend Japan & 1,400 1,209 1,314 1,205 Korea 1,131 1,200 1,053 13% Revenue ($M) 1,000 China Europe 800 13% 14% 600 Other 3% 400 200 FY24 Q4 0 FY23 Q4 FY24 Q1 FY24 Q2 FY24 Q3 FY24 Q4 Other 31 27 28 30 36 China 137 132 162 154
Slide 16: First Quarter Fiscal 2025 Outlook
FIRST QUARTER FISCAL 2025 OUTLOOK REVENUE $1.27 – 1.35 billion NON-GAAP GROSS MARGIN 36 – 38% NON-GAAP OPERATING EXPENSES $260 – 280 million NON-GAAP TAX RATE 20 – 23% NON-GAAP EARNINGS PER SHARE $0.53 – 0.69(1) (1) The Company does not provide reconciliations of forward-looking Non-GAAP EPS. The Co
Slide 17: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION Copyright 2024, Coherent. All rights reserved. 17
Slide 18: Gross Profit Reconciliation
GROSS PROFIT RECONCILIATION $ Millions (Unaudited) Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Gross profit on GAAP basis 432 367 351 307 343 Share-based compensation 5 5 5 7 5 Amortization of acquired intangibles 30 31 30 31 39 Fair value adjustment on acquired inventory — — —
Slide 19: Operating Expense Reconciliation
OPERATING EXPENSE RECONCILIATION $ Millions (Unaudited) Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Internal R&D on GAAP basis 127 128 111 114 123 Share-based compensation (5) (5) (5) (8) (5) Amortization of acquired intangibles (1) (1) (1) (1) (1) Start-up costs — (1) (1) (0) —
Slide 20: Income from Operations Reconciliation
INCOME FROM OPERATIONS RECONCILIATION $ Millions (Unaudited) Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Op. income (loss) on GAAP basis 63 22 32 (21) (155) Share-based compensation 29 26 27 45 26 Fair value adjustment on acquired inventory — — — — — Amortization of acquired int
Slide 21: Net Earnings Reconciliation
NET EARNINGS RECONCILIATION $ Millions (Unaudited) Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Net earnings (loss) attributable to Coherent Corp. on (48) (13) (27) (68) (178) GAAP basis Share-based compensation 29 26 27 45 26 Amortization of acquired intangibles 72 72 72 73 134
Slide 22: Net Earnings per Common Share
NET EARNINGS PER COMMON SHARE $ (Unaudited) Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Net earnings (loss) attributable to Coherent Corp., GAAP Basic Earnings (Loss) Per Share (0.52) (0.29) (0.38) (0.65) (1.54) Diluted Earnings (Loss) Per Share (0.52) (0.29) (0.38) (0.65) (1.54
Slide 23: Net Earnings, GAAP, and Adjusted EBITDA Reconciliation
NET EARNINGS, GAAP, AND ADJUSTED EBITDA RECONCILIATION $ Millions (Unaudited) Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Net earnings (loss) on GAAP basis (47) (16) (29) (68) (178) Income taxes (benefit) 57 (16) (9) (21) (55) Depreciation and amortization 144 140 138 138 204 In
Slide 24: Coherent
COHERENT