COHR 10-Q filed 2026-11-04 | Key takeaways
COHR filed its 10-Q; the most relevant disclosure change is expanded Regulatory matters: In January 2025, the Company received an inquiry from the Bureau of Industry and Security (BIS) concerning past product sales to Huawei; the Company is cooperating with BIS's inquiry and conducting an internal review of those sales to determine what products a. Customer concentration: Major Customer One represented 20% of revenue; Major Customer Two represented 12% of revenue.
Key takeaways
Revenue: Q1 FY2026 revenues of $2.37 billion increased 50% YoY from $1.58 billion; Datacenter & Communications segment grew 79% to $1.95 billion while Industrial segment declined 15% to $419 million.
Capital expenditures: Q1 FY2026 capex of $776 million compared to $105 million in Q1 FY2025, reflecting significant investment in manufacturing capacity expansion.
Regulatory matter: BIS inquiry concerning past product sales to Huawei; company has stopped shipping products to Huawei and is cooperating with the inquiry; potential penalties cannot be estimated at this time.
Customer concentration: One major customer accounted for 20% of consolidated revenue during fiscal 2026 (prior year); revenue concentration in Datacenter & Communications segment creates customer concentration risk.
Debt and liquidity: Total debt obligations increased to $4.0 billion from $3.2 billion at June 30, 2026; new August 2026 Facility ($950 million) and 2026 Credit Lines ($475 million) entered into by foreign subsidiaries.
Key metrics
Customer concentration
Disclosure changes
- Regulatory matters
In January 2025, the Company received an inquiry from the Bureau of Industry and Security (BIS) concerning past product sales to Huawei; the Company is cooperating with BIS's inquiry and conducting an internal review of those sales to determine what products are subject to Export Administration Regulations (EAR) and consequently restricted for export, reexport, and transfer when Huawei is a party to the transaction. The Company has stopped shipping products to Huawei. The Company is currently in discussions with...
BIS inquiry regarding Huawei sales could result in significant penalties; potential material liability cannot be estimated - Assets held-for-sale and impairment
In fiscal 2026, the Company recorded additional non-cash impairment charges of $64 million related to three entities within the Industrial segment. Two of these entities had already been classified as held-for-sale as of June 30, 2025 and remained classified as held-for-sale during the first and second quarters of fiscal 2026, while the third entity was classified as held-for-sale during the fourth quarter of fiscal 2026 and remains classified as held-for-sale at September 30, 2026.
Additional $64 million in impairment charges recorded in fiscal 2026 for Industrial segment divestitures - Segment reclassification and goodwill reallocation
Goodwill reclassifications include the transfer of $141 million of goodwill from the Industrial segment to the Datacenter & Communications segment related to the movement of certain business units effective as of the first day of fiscal 2027. Goodwill was reallocated using a relative fair value approach. As a result of the transfer between reportable segments, the Company performed an impairment assessment immediately before and immediately after the transfer became effective, and no impairment of goodwill was i...
Future segment reclassification planned for Q1 FY2027 with $141 million goodwill reallocation - Debt - new credit facilities
On August 12, 2026, a wholly-owned foreign subsidiary entered into an unsecured credit facility with local lenders providing aggregate commitments of approximately $950 million. The facility consists of a local currency tranche (sublimit $475 million) and a U.S. Dollar tranche (sublimit $475 million). The August 2026 Facility matures 36 months from first utilization and had $598 million outstanding as of September 30, 2026. Additionally, in June, July, and August 2026, two wholly-owned foreign subsidiaries enter...
Total debt increased to $4.0 billion from $3.2 billion; new foreign subsidiary credit facilities not guaranteed by parent - Preferred stock conversion
No Series B Preferred Stock was outstanding at June 30, 2026 or September 30, 2026. During the quarter ended December 31, 2025, 75,000 shares and 140,000 shares of previously issued Series B-1 and B-2 convertible preferred stock were converted into an aggregate of 30.1 million shares of Common Stock.
Series B Preferred Stock fully converted to common stock; no preferred dividends in Q1 FY2026 versus $33 million in Q1 FY2025 - Tariff refunds
On February 20, 2026, the U.S. Supreme Court ruled that tariffs imposed under IEEPA were not authorized. During the fourth quarter of fiscal 2026, following court orders directing U.S. Customs to refund such duties, the Company concluded that recovery of a portion of previously paid tariffs was probable. The Company recorded the receipt of tariff refunds received and recognized a net receivable for additional refunds expected to be recovered. The amounts recorded were not material to the Company.
Company is importer of record for certain raw materials and products subject to IEEPA tariffs; tariff refunds recorded as probable recovery
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