Slide 1: Investor Presentation
INVESTOR PRESENTATION May 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 regarding (i) our future financial and operational results (including expectations for future growth); (ii) capital expenditures and the results of
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 FY23 26,000+ Employees (1) $5.2 B Revenue Available 2,400+ Research & Development (1) $64 B Market (1) 3,000+ Patents (1) 126 Locations Materials, Components, VERTICAL INTEG
Slide 4: Insightful Targeting and Integration of Strategic Acquisitions
INSIGHTFUL TARGETING AND INTEGRATION OF STRATEGIC ACQUISITIONS 5 Transformative Acquisitions 5.2 2022 - Laser sources & systems 2019 - Indium phosphide technology platform 2016 - Epitaxial wafer and SiC electronic devices 2013 - Gallium arsenide technology platform 2010 - Optical networks & China ma
Slide 5: $5.2 Billion of Revenue in FY23 Well Diversified
$5.2 BILLION OF REVENUE IN FY23 WELL DIVERSIFIED ACROSS TECHNOLOGY, PRODUCTS, AND GEOGRAPHIC MARKETS Segments Markets Regions Communications North Materials America Europe Industrial Lasers 19% 29% 26% 34% BY REPORTING 45% China BY MARKET BY REGION(1) 11% SEGMENT 53% 14% 9% 45% 3% Korea & Japan 12%
Slide 6: 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 7: 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 8: 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 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: Artificial Intelligence: A Revolution
ARTIFICIAL INTELLIGENCE: A REVOLUTION Driving growth in the cloud and beyond Copyright 2024, Coherent. All rights reserved. 11
Slide 12: 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 13: Silicon Carbide Power Semiconductors: Another Revolution
SILICON CARBIDE POWER SEMICONDUCTORS: ANOTHER REVOLUTION Electrification of transportation Sustainability of the planet Copyright 2024, Coherent. All rights reserved. 13
Slide 14: Silicon Carbide Business Overview
SILICON CARBIDE BUSINESS OVERVIEW Business Overview FY24 Key Stats Leading global supplier of silicon carbide (SiC) substrates for power device and radio frequency end market applications Large addressable market estimated to grow from $3 billion in 2022 to $21 billion in 2030 (28% CAGR) >50% Grow
Slide 15: Silicon Carbide Investment Transaction
SILICON CARBIDE INVESTMENT TRANSACTION TO SEPARATE SILICON CARBIDE BUSINESS WITH MARKET-LEADING PARTNERS Pioneer in silicon carbide power Global Tier-1 automotive supplier; Leader in materials, networking and devices; leading capabilities in electrification laser technologies leading capabilities in
Slide 16: Silicon Carbide Investment Transaction Details
SILICON CARBIDE INVESTMENT TRANSACTION DETAILS Transaction Structure On December 4, 2023, Coherent separated and contributed its silicon carbide (SiC) business to newly formed subsidiary at a $4 billion valuation Mitsubishi Electric and DENSO invested $1 billion into the new subsidiary in exchan
Slide 17: Strategic Benefits of the Silicon Carbide Investment Transaction
STRATEGIC BENEFITS OF THE SILICON CARBIDE INVESTMENT TRANSACTION Silicon Carbide Business $1.0 billion capital to fund and accelerate growth plans Long-term supply agreements with market-leading partners to support expansion of wafer shipments Deepen strategic partnership with Mitsubishi Elect
Slide 18: Financial Highlights
FINANCIAL HIGHLIGHTS Copyright 2024, Coherent. All rights reserved. 18
Slide 19: Third Quarter Fiscal 2024 Highlights
THIRD QUARTER FISCAL 2024 HIGHLIGHTS REVENUE $1.209 billion, above the high end of our $1.120 – 1.200 billion guidance. Non-GAAP EPS $0.53, above the high end of our $0.32 – 0.52 guidance and up from $0.36 in the preceding quarter. OPERATING $117 million, compared to $152 million in the year-ago qua
Slide 20: Third Quarter Fiscal 2024 Highlights - Continued
THIRD QUARTER FISCAL 2024 HIGHLIGHTS - CONTINUED We enjoyed a fourth straight quarter of strong demand for our AI/ML-related Datacom transceivers. Our 800G revenue increased sequentially by almost 80% to almost $200 million and is on track to exceed $250M in our fourth quarter of fiscal 2024. In res
Slide 21: Quarterly Revenue by Segment
QUARTERLY REVENUE BY SEGMENT REVENUE DISTRIBUTION BY SEGMENT Revenue Distribution (1) Quarterly Revenue by Segment 1,400 1,240 1,205 1,209 1,200 1,131 1,053 1,000 Lasers 29% Materials 20% Revenue ($M) 800 600 FY24 Q3 400 200 0 51% FY23 Q3 FY23 Q4 FY24 Q1 FY24 Q2 FY24 Q3 Lasers 365 333 336 354 351 Ne
Slide 22: Quarterly Backlog by Segment
QUARTERLY BACKLOG BY SEGMENT BACKLOG DISTRIBUTION BY SEGMENT Quarterly Backlog Trend Backlog Distribution (1) 3,500 2,893 2,883 3,000 2,609 2,745 2,735 2,500 Lasers 30% Materials Backlog ($M) 2,000 21% 1,500 1,000 FY24 Q3 500 0 FY23 Q3 FY23 Q4 FY24 Q1 FY24 Q2 FY24 Q3 Lasers 867 878 821 812 815 49% N
Slide 23: Quarterly Revenue by Market
QUARTERLY REVENUE BY MARKET REVENUE DISTRIBUTION BY MARKET Quarterly Revenue Trend Revenue Distribution (1) 1,400 1,240 1,205 1,209 1,131 1,200 1,053 1,000 Instrumentation Industrial Revenue ($M) 35% 800 8% 600 Electronics 6% 400 FY24 Q3 200 0 FY23 Q3 FY23 Q4 FY24 Q1 FY24 Q2 FY24 Q3 Instrumentation
Slide 24: Quarterly Revenue by Region
QUARTERLY REVENUE BY REGION REVENUE DISTRIBUTION BY REGION Quarterly Revenue Trend Revenue Distribution Japan & (1) 1,400 1,240 1,205 1,209 Korea 1,131 1,200 1,053 13% Revenue ($M) 1,000 China Europe 800 13% 15% 600 Other 2% 400 200 FY24 Q3 0 FY23 Q3 FY23 Q4 FY24 Q1 FY24 Q2 FY24 Q3 Other 37 31 27 28
Slide 25: Fourth Quarter Fiscal 2024 Outlook
FOURTH QUARTER FISCAL 2024 OUTLOOK Revenue $1.23 – 1.32 billion Non-GAAP Gross Margin 36.0 – 37.5% Non-GAAP Operating Expenses $254 – 270 million Non-GAAP Operating Margin 16 – 17% Non-GAAP Adjusted EBITDA 22 – 23% Interest Expense $66 – 69 million Non-GAAP Tax Rate 16 – 19% Series B Preferred P.I.K
Slide 26: Fiscal 2024 Full Year Outlook
FISCAL 2024 FULL YEAR OUTLOOK Revenue $4.62 – 4.70 billion Non-GAAP Gross Margin 35.7 – 36.3% Non-GAAP Operating Expenses $975 million – 990 million Non-GAAP Operating Margin 14.7 – 15.2% Non-GAAP Adjusted EBITDA 21.0 – 21.5% Interest Expense $286 – 290 million Non-GAAP Tax Rate 17 – 18% Series B Pr
Slide 27: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION Copyright 2024, Coherent. All rights reserved. 27
Slide 28: Gross Profit Reconciliation
GROSS PROFIT RECONCILIATION $ Millions (Unaudited) Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Gross profit on GAAP basis 367 351 307 343 420 Share-based compensation 5 5 7 5 7 Amortization of acquired intangibles 31 30 31 39 31 Fair value adjustment on acquired inventory — — —
Slide 29: Operating Expense Reconciliation
OPERATING EXPENSE RECONCILIATION $ Millions (Unaudited) Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Internal R&D on GAAP basis 128 111 114 123 126 Share-based compensation (5) (5) (8) (5) (6) Amortization of acquired intangibles (1) (1) (1) (1) (0) Start-up costs (1) (1) (0) — —
Slide 30: Income from Operations Reconciliation
INCOME FROM OPERATIONS RECONCILIATION $ Millions (Unaudited) Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Op. income (loss) on GAAP basis 22 32 (21) (155) 67 Share-based compensation 26 27 45 26 35 Fair value adjustment on acquired inventory — — — — — Amortization of acquired int
Slide 31: Net Earnings Reconciliation
NET EARNINGS RECONCILIATION $ Millions (Unaudited) Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Net earnings (loss) attributable to Coherent (13) (27) (68) (178) 3 Corp. on GAAP basis Share-based compensation 26 27 45 26 35 Amortization of acquired intangibles 72 72 73 134 93 Fai
Slide 32: Net Earnings per Common Share
NET EARNINGS PER COMMON SHARE $ (Unaudited) Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Net earnings (loss) attributable to Coherent Corp., GAAP Basic Earnings (Loss) Per Share (0.29) (0.38) (0.65) (1.54) (0.24) Diluted Earnings (Loss) Per Share (0.29) (0.38) (0.65) (1.54) (0.24
Slide 33: Net Earnings, GAAP, and Adjusted EBITDA Reconciliation
NET EARNINGS, GAAP, AND ADJUSTED EBITDA RECONCILIATION $ Millions (Unaudited) Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Net earnings (loss) on GAAP basis (16) (29) (68) (178) 3 Income taxes (benefit) (16) (9) (21) (55) (7) Depreciation and amortization 140 138 138 204 161 Inte
Slide 34: Reconciliation of GAAP Measures to Non-GAAP Measures
Reconciliation of GAAP Segment Operating Income (Loss) to RECONCILIATION OF GAAP MEASURES Segment Non-GAAP Operating Income (Loss)* $ Millions TO NON-GAAP MEASURES (Unaudited) Three Months Ended Year Ended Jun 30, Mar 31, Jun 30, Jun 30, Jun 30, 2023 2023 2022 2023 2022 Networking GAAP Operating Inc
Slide 35: Coherent
COHERENT