Optical suppliers are guiding far above the models, and the tape is still fading the prints

by Clara Borresen · August 12, 2026

Senior Earnings Analyst, Earnings Dispatch

The most aggressive forward guidance of the week is coming out of the optical components complex, and it is not being rewarded in a straight line. Coherent closed its fiscal 2026 after Wednesday's bell with a quarter that beat on both lines and a fiscal first-quarter outlook that ran well ahead of published estimates. The stock, which had already climbed roughly 8% during the regular session on a read-through from a peer's results, gave ground in extended-hours trading rather than extending the move.

The reported quarter was strong on its own terms. Coherent's release, carried by StockTitan, put fiscal fourth-quarter revenue at $2.05 billion, up 33.8% year over year and 13.3% sequentially. GAAP gross margin was 38.5%, an improvement of 277 basis points from a year earlier, with non-GAAP gross margin at 40.2%, up 215 basis points. GAAP diluted earnings per share came in at $1.19 and non-GAAP diluted EPS at $1.74. Investing.com reported that the non-GAAP figure topped a $1.62 consensus and that revenue cleared a $1.98 billion estimate.

The full-year picture underlines how much the mix has shifted toward AI infrastructure. Coherent finished fiscal 2026 with $7.118 billion of revenue, up 22.5% from $5.81 billion in fiscal 2025, and non-GAAP diluted EPS of $5.61 against $3.53 a year earlier. GAAP diluted EPS swung to $4.12 from a loss of $0.52. Within the fourth quarter, the datacenter and communications segment produced $1.615 billion of revenue against $430.5 million from the industrial segment — a roughly four-to-one split that leaves the company's near-term trajectory tied closely to hyperscale build cycles.

Chief executive Jim Anderson, in the company's release, called it "an outstanding year for Coherent, with record revenue, significant margin expansion, and non-GAAP EPS growth that was more than twice the rate of revenue growth."

The guidance is what separated this release from a routine beat. Coherent pointed to fiscal first-quarter revenue of $2.2 billion to $2.4 billion, non-GAAP gross margin of 39.5% to 41.5%, non-GAAP operating expenses of $400 million to $420 million, a non-GAAP tax rate of 18% to 20%, and non-GAAP EPS of $1.85 to $2.05. Investing.com calculated the revenue midpoint at roughly 8% above a $2.13 billion consensus and the earnings midpoint about 10% above a $1.77 estimate. Guidance gaps of that size are rare this deep into an earnings season in which most managements have been trimming their forward language rather than stretching it.

The reaction ran the other way. Investing.com put the extended-hours decline at 5% in one account of the release and at 3.3%, to $343.81, in another, describing it in both as a sell-the-news response to a stock that had already advanced roughly 8% during Wednesday's regular session on positive guidance from peer Lumentum Holdings. None of that has yet been tested by a full regular session, and pre-earnings run-ups of that magnitude routinely compress the room a company has to surprise.

Lumentum's own quarter, reported after Tuesday's close on Aug. 11, is the reason the group was bid in the first place. The company posted fiscal fourth-quarter net revenue of $1.0063 billion, up 109.3% year over year, with GAAP gross margin of 47.4% and non-GAAP gross margin of 50.4%, according to its release. Non-GAAP diluted EPS was $3.23. The GAAP diluted loss of $84.65 per share is not an operating figure — the company attributed it to a non-cash debt extinguishment charge of roughly $7.8 billion, the kind of item that renders a GAAP earnings line uninformative for one period.

Lumentum's forward numbers were similarly outsized: fiscal first-quarter net revenue of $1.225 billion to $1.275 billion, non-GAAP operating margin of 39.5% to 40.5%, and non-GAAP diluted EPS of $4.05 to $4.35. President and chief executive Michael Hurlston said in the release that "Lumentum is positioned at the heart of a secular industry shift. As AI compute workloads increase in both speed and bandwidth, data center architects are turning to optical links as a primary means of connectivity."

Taken together, the two outlooks describe a supply chain whose order books are running visibly ahead of what sell-side models had assumed, with margins expanding at the same time — an unusual combination in components businesses, where volume growth historically arrives with price concessions. What the tape showed Wednesday evening is that expectations have moved too. The broader market was calm about it: the S&P 500 closed at 7,748.53, up 0.26%, and the VIX finished at 14.55, down 4.78%, per Investing.com's close report, with July CPI having landed in line at 0.1% month over month and 3.4% year over year. In that environment, a guide 8% above consensus is a starting point for the conversation rather than the end of it.