Slide 1: Investor Presentation February 2024
Exhibit 99.3 INVESTOR PRESENTATION February 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 (i) for our future financial and operational results (including expectations for future growth); (ii) regarding capital expenditures and the results
Slide 3: Coherent at a Glance
FROM A FOUNDATION OF MATERIALS AND IMAGINATION, WE ENABLE EXCITING MEGATRENDS COHERENT AT A GLANCE Year Founded NYSE 1971 COHR FY23 (1) Employees 26,000+ $5.2 B Revenue Available (1) Research & Development (1) 2,400+ $64 B Market (1) Patents Locations 3,000+ 126 Materials, Components, VERTICAL Subsy
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 Regions Segments Markets North Communications Materials Europe America Industrial 19% Lasers 26% 29% 34% 45% China BY REPORTING (1) 11% BY MARKET BY REGION 53% SEGMENT 14% 9% Korea & Japan 3% 45% 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: LightCounting, Omdia, Sources: Optech Consulting, Sources: IDC, Morgan Stanley, S
Slide 7: Industrial Market Verticals and Megatrends
INDUSTRIAL MARKET VERTICALS AND MEGATRENDS PRODUCTS VALUE PROPOSITION Precision manufacturing§ Fiber lasers for laser welding of batteries§ 50 years of experience in laser technology § UV lasers for OLED manufacturing§ Long term technology partner across all § Giga factories for EV battery processin
Slide 8: Communications Market Verticals and Megatrends
COMMUNICATIONS MARKET VERTICALS AND MEGATRENDS PRODUCTS VALUE PROPOSITION Datacom§ 100 to 800 Gbps datacom transceivers§ Largest supplier of optical communications components § Increasing spend on cloud infrastructure § Pluggable coherent transceivers § Vertically integrated from material through §
Slide 9: Electronics Market Verticals and Megatrends
ELECTRONICS MARKET VERTICALS AND MEGATRENDS PRODUCTS VALUE PROPOSITION Consumer electronics§ GaAs and InP optoelectronics § Broadest portfolio of optoelectronics, optics, and electronics § Advanced sensing § VCSELs and edge emitting lasers § High-volume consumer electronics § AR/VR § Laser illuminat
Slide 10: Instrumentation Market Verticals and Megatrends
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 § Components
Slide 11: Artificial Intelligence: A Revolution
ARTIFICIAL INTELLIGENCE: A REVOLUTION Driving growth in the cloud and beyond 11 Copyright 2024, Coherent. All rights reserved.
Slide 12: Datacom Transceiver Global Market
DATACOM TRANSCEIVER GLOBAL MARKET $M $1.3 billion $16,000 in sales in datacom in FY23 $14,000 $12,000 3.2T 1.6T $10,000 200G 800G and higher data-rate transceivers 400G $8,000 >65% of our revenue 200G 100G $6,000 50G $4,000 40G 800G $2,000 and higher data-rate $- transceivers > 65% of the total 2018
Slide 13: Datacom Transceiver Opportunity by Laser Type
DATACOM TRANSCEIVER OPPORTUNITY BY LASER TYPE CY23 Transceiver Opportunity ($B) CY28 Transceiver Opportunity ($B) VCSEL AI $0.3 DML - Other 6% VCSEL AI $0.7 5% $0.4 2% DML AI VCSEL - Other $0 0% DML - Other $1.5 10% VCSEL - Other $1.6 29% DML $1.5 27% SiPho AI $.7 VCSEL DML $1.2 8% VCSEL $1.9 $1.6 $
Slide 14: Silicon Carbide Power Semiconductors: Another Revolution
SILICON CARBIDE POWER SEMICONDUCTORS: ANOTHER REVOLUTION Electrification of transportation Sustainability of the planet 14 Copyright 2024, Coherent. All rights reserved.
Slide 15: Silicon Carbide Business Overview
SILICON CARBIDE BUSINESS OVERVIEW FY24 Key Stats Business Overview Leading global supplier of silicon carbide (SiC) substrates for power device and radio frequency end market applications ~$300M >50% — Large addressable market estimated to grow from $3 billion in 2022 to $21 billion in 2030 (28% CAG
Slide 16: 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 17: Silicon Carbide Investment Transaction Details
SILICON CARBIDE INVESTMENT TRANSACTION DETAILS § On December 4, 2023, Coherent separated and contributed its silicon carbide (SiC) business to Transaction Structure newly formed subsidiary at a $4 billion valuation § Mitsubishi Electric and DENSO invested $1 billion into the new subsidiary in exchan
Slide 18: Strategic Benefits of the Silicon Carbide Investment Transaction
STRATEGIC BENEFITS OF THE SILICON CARBIDE INVESTMENT TRANSACTION § $1.0 billion capital to fund and accelerate growth plans Silicon Carbide Business § Long-term supply agreements with market-leading partners to support expansion of wafer shipments § Deepen strategic partnership with Mitsubishi Elect
Slide 19: Financial Highlights
FINANCIAL HIGHLIGHTS 19 Copyright 2024, Coherent. All rights reserved.
Slide 20: FY24 Q2 Highlights
FY24 Q2 HIGHLIGHTS $1.131 billion, above the midpoint of our $1.075 – $1.175 billion guidance. REVENUE $0.36, above the high end of our $0.14 – $0.32 guidance and up from $0.16 in the preceding quarter driven Non-GAAP EPS primarily by the strong gross margin upside, favorable operating leverage, and
Slide 21: FY24 Q2 Highlights - Continued
FY24 Q2 HIGHLIGHTS - CONTINUED We enjoyed a third straight quarter of strong orders for our AI/ML-related Datacom transceivers. Our 800G revenue increased sequentially by over 100% to cross the $100 million quarterly threshold just over one year since initial shipments, which marks one of the fastes
Slide 22: Revenue by Segment
REVENUE BY SEGMENT (1) Quarterly Revenue Trend Revenue Distribution 1,600 1,400 Lasers Materials 1,200 22% 1,000 31% 800 600 FY24 Q2 400 200 0 FY23 Q2 FY23 Q3 FY23 Q4 FY24 Q1 FY24 Q2 46% Lasers 379 365 333 336 354 Networking 609 551 585 473 524 Materials 382 324 288 245 254 Networking (1) Amounts ma
Slide 23: Backlog by Segment
BACKLOG BY SEGMENT (1) Quarterly Backlog Trend Backlog Distribution 3,500 3,000 Lasers Materials 2,500 22% 28% 2,000 1,500 FY24 Q2 1,000 500 0 FY23 Q2 FY23 Q3 FY23 Q4 FY24 Q1 FY24 Q2 50% Lasers 932 867 878 821 812 Networking 1,218 1,075 1,217 1,404 1,446 Materials 714 667 650 668 625 Networking (1)
Slide 24: Revenue by Market
REVENUE BY MARKET (1) Quarterly Revenue Trend Revenue Distribution 1,600 Instrumentation 1,400 1,200 Industrial 9% Electronics 1,000 8% 800 37% 600 FY24 Q2 400 200 0 FY23 Q2 FY23 Q3 FY23 Q4 FY24 Q1 FY24 Q2 46% Instrumentation 120 125 117 99 99 Electronics 200 139 106 90 89 Communications 600 538 570
Slide 25: Revenue by Region
REVENUE BY REGION (2) (1) Quarterly Revenue Trend Revenue Distribution 1,600 Other 1,400 China North 1,200 2% America 1,000 14% 800 Japan & 600 Korea 14% 400 FY24 Q2 200 55% 0 FY23 Q2 FY23 Q3 FY23 Q4 FY24 Q1 FY24 Q2 Other 36 37 31 27 28 14% China 153 135 137 132 162 Japan & Korea 178 171 166 148 158
Slide 26: FY24 Q3 Outlook
FY24 Q3 OUTLOOK Revenue $1.12 – 1.20 billion Non-GAAP Gross Margin 36 – 38% Non-GAAP Operating Expenses $246 – 262 million Non-GAAP Operating Margin 14 – 16% Non-GAAP Adjusted EBITDA 21 – 23% Interest Expense $70 – 74 million Non-GAAP Tax Rate 16 – 19% Series B Preferred P.I.K. Dividend Approximatel
Slide 27: FY24 Full Year Outlook
FY24 FULL YEAR OUTLOOK Revenue $4.55 – 4.7 billion Non-GAAP Gross Margin 36 – 38% Non-GAAP Operating Expenses $990 million – 1.015 billion Non-GAAP Operating Margin 14 – 16% Non-GAAP Adjusted EBITDA 20 – 22% Interest Expense $284 – 294 million Non-GAAP Tax Rate 20 – 22% Series B Preferred P.I.K. Div
Slide 28: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION 28 Copyright 2024, Coherent. All rights reserved.
Slide 29: Gross Profit Reconciliation
GROSS PROFIT RECONCILIATION $ Millions (Unaudited) Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Gross profit on GAAP basis 351 307 343 420 411 Share-based compensation 57576 Amortization of acquired intangibles 30 31 39 31 15 Fair value adjustment on acquired inventory — — — — 11
Slide 30: Operating Expense Reconciliation
OPERATING EXPENSE RECONCILIATION $ Millions (Unaudited) Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Internal R&D on GAAP basis 111 114 123 126 129 Share-based compensation (5) (8) (5) (6) (6) Amortization of acquired intangibles (1) (1) (1) (0) — Start-up costs (1) (0) — — — Int
Slide 31: Income from Operations Reconciliation
INCOME FROM OPERATIONS RECONCILIATION Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 $ Millions (Unaudited) Op. income (loss) on GAAP basis 32 (21) (155) 67 8 Share-based compensation 27 45 26 35 35 Fair value adjustment on acquired inventory — — — — 112 Amortization of acquired in
Slide 32: Net Earnings Reconciliation
NET EARNINGS RECONCILIATION $ Millions (Unaudited) Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Net earnings (loss) attributable to Coherent (27) (68) (178) 3 (45) Corp. on GAAP basis Share-based compensation 27 45 26 35 35 Amortization of acquired intangibles 72 73 134 93 105 Fa
Slide 33: Net Earnings Per Common Share
NET EARNINGS PER COMMON SHARE $ (Unaudited) Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Net earnings (loss) attributable to Coherent Corp., GAAP Basic Earnings (Loss) Per Share (0.38) (0.65) (1.54) (0.24) (0.58) Diluted Earnings (Loss) Per Share (0.38) (0.65) (1.54) (0.24) (0.58
Slide 34: Net Earnings, GAAP, and Adjusted EBITDA Reconciliation
NET EARNINGS, GAAP, AND ADJUSTED EBITDA RECONCILIATION 34 Copyright 2024, Coherent. All rights reserved.
Slide 35: Reconciliation of GAAP Measures to Non-GAAP Measures
Reconciliation of GAAP Segment Operating Income (Loss) to Segment Non-GAAP Operating Income (Loss)* RECONCILIATION OF GAAP MEASURES $ Millions (Unaudited) Three Months Ended Year Ended Jun 30, Mar 31, Jun 30, Jun 30, Jun 30, TO NON-GAAP MEASURES 2023 2023 2022 2023 2022 Networking GAAP Operating Inc
Slide 36: Financial Appendix
FINANCIAL APPENDIX 36 Copyright 2024, Coherent. All rights reserved.
Slide 37: Well Capitalized for Future Growth
(1) WELL CAPITALIZED FOR FUTURE GROWTH External Financing Sources Leverage (1) Total Debt $4.29 billion 3.2x § $3.3B secured term loans Debt§ $990M high yield bonds (3) Cash $0.86 billion § $345M revolver availability (1) Net Debt $3.44 billion 2.5x PF Combined $1,360 million § $2.4B series B invest
Slide 38: Debt Exposed to Floating Rates Decreases During FY24
DEBT EXPOSED TO FLOATING RATES DECREASES DURING FY24 Debt exposed to floating rates makes up 46% 58% 44% 44% of capital structure by June 30, 2024 1.92% Interest Rate Cap 1.42% Interest Rate Swap 5.0% High Yield Bonds Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Fixed Rate Hedged Floating Rate 38 Copyright 20
Slide 39: Significant Cost Reductions from Restructuring Announced on May 10, 2023
SIGNIFICANT COST REDUCTIONS FROM RESTRUCTURING ANNOUNCED ON MAY 10, 2023 Previous Outlook Current Outlook (as of Q1 FY24) Cumulative savings for the period of $200 – 250M $200 – 300M FY23 to FY25 Annual savings by FY25 $110 – 140M $110 – 140M Cost to achieve savings $175 – 200M $175 – 200M 39 Copyri
Slide 40: ESG - Global Diversity, Equity, and Inclusion Strategy
ESG - GLOBAL DIVERSITY, EQUITY, AND INCLUSION STRATEGY Cultivate diverse teams that drive innovation, uphold our core values and achieve better business results by: Strategic Objectives Areas of Focus Fostering Inclusion and Belonging Community An environment that embraces and respects Connecting in
Slide 41: Coherent
COHERENT