# EDGAR Filing Document

**Accession Number:** 0000820318
**File Stem:** 0000820318-25-000024
**Filing Date:** 2025-12
**Character Count:** 263623
**Document Hash:** 851a55b3d39f54ee54f11ba731a0d6ae
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000820318-25-000024.hdr.sgml**: 20251216

**ACCESSION NUMBER**: 0000820318-25-000024

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 118

**CONFORMED PERIOD OF REPORT**: 20251216

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20251216

**DATE AS OF CHANGE**: 20251216

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** COHERENT CORP.
- **CENTRAL INDEX KEY:** 0000820318
- **STANDARD INDUSTRIAL CLASSIFICATION:** OPTICAL INSTRUMENTS & LENSES [3827]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 251214948
- **STATE OF INCORPORATION:** PA
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39375
- **FILM NUMBER:** 251575183

**BUSINESS ADDRESS:**
- **STREET 1:** 375 SAXONBURG BLVD
- **CITY:** SAXONBURG
- **STATE:** PA
- **ZIP:** 16056
- **BUSINESS PHONE:** 724-352-4455

**MAIL ADDRESS:**
- **STREET 1:** 375 SAXONBURG BLVD
- **CITY:** SAXONBURG
- **STATE:** PA
- **ZIP:** 16056

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** II-VI INC
- **DATE OF NAME CHANGE:** 19920703

?xml version='1.0' encoding='ASCII'? iivi-20251216

**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K** 

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d)**

**of the Securities Exchange Act of 1934**

**Date of Report (Date of earliest event Reported): December 16, 2025**

**Coherent Corp.** 

**(Exact Name of Registrant as Specified in Charter)**

---

| | | |
|:---|:---|:---|
| **Pennsylvania** | **001-39375** | **25-1214948** |
| **(State or Other Jurisdiction<br>of Incorporation)** | **(Commission<br>File Number)** | **(I.R.S. Employer<br>Identification Number)** |

---

**375 Saxonburg Boulevard,** 

**Saxonburg, Pennsylvania 16056** 

**(Address of Principal Executive Office) (Zip Code)**

**(724) 352-4455** 

**(Registrant's telephone number, including area code)**

**Not Applicable** 

**(Former name or former address, if changed since last report)**

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐&nbsp;&nbsp;&nbsp;&nbsp;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐&nbsp;&nbsp;&nbsp;&nbsp;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐&nbsp;&nbsp;&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐&nbsp;&nbsp;&nbsp;&nbsp;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading<br>Symbol(s)** | **Name of each exchange <br>on which registered** |
| Common Stock, no par value | COHR | New York Stock Exchange |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Item 8.01. Other Events.**

As previously disclosed in a Current Report on Form 10-K dated August 15, 2025, effective with the beginning of its 2026 fiscal year on July 1, 2025, Coherent Corp. (the "Company") began operating under two revised business segments: Datacenter & Communications; and Industrial. The Company's businesses are organized and managed under two segments based on similarities in products and services.

The Company is filing information under Item 8.01 of this Current Report on Form 8-K (this "Form 8-K") to (i) provide investors with recast historical financial information for periods prior to the segment change, and (ii) incorporate by reference that recast historical financial information into the Company's filings with the Securities and Exchange Commission, including registration statements filed under the Securities Act of 1933, as amended.

The following items from the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (the "2025 Form 10-K") are being revised and updated from their previous presentation solely to reflect the Company's new segment structure, as reflected in Exhibit 99.1 to this Form 8-K:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Part I, Item 1. Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Part II, Item 8. Financial Statements and Supplementary Data.

Except for minor, non-substantive revisions, only the following notes to the consolidated financial statements have been revised from their previous presentation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Note 1 - Nature of Business and Summary of Significant Accounting Policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Note 3 - Revenue from Contracts with Customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Note 6 - Goodwill and Other Intangible Assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Note 14 - Segment and Geographic Reporting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Note 20 - Restructuring Plans; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Note 21 - Assets Held-for-Sale.

The changes referred to above had no impact on the Company's historical consolidated financial position, results of operations or cash flows, and the recast financial information contained in Exhibit 99.1 to this Form 8-K does not represent a restatement of previously issued financial statements.

Also included in Exhibit 99.1 is the report of Ernst & Young LLP, our independent registered public accounting firm, on the consolidated financial statements, which is unchanged from the report included in the 2025 Form 10-K, other than the dual date to include the recast and reissuance of the consolidated financial statement footnote information.

This Form 8-K does not modify or update other 2025 Form 10-K information in any way, nor does it reflect any subsequent information or events, other than as required to reflect the change in segments as described above.

The information in this Form 8-K, including Exhibit 99.1, should be read in conjunction with the 2025 Form 10-K and any other documents filed by the Company pursuant to the Securities Exchange Act of 1934, as amended, subsequent to August 15, 2025, which are incorporated herein by reference.

**Item 9.01.&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements and Exhibits.**

(d)Exhibits

---

| | |
|:---|:---|
| <u>[23.01](exhibit2301-accountingfirm.htm)</u> | Consent of Ernst & Young, LLP. |
| <u>[99.1](iivi-20251216_d2.htm)</u> | Revised Part I, Item 1. "Business," Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations," and Part II, Item 8. "Financial Statements and Supplementary Data" of Coherent Corp.'s Annual Report on Form 10-K for the year ended June 30, 2025. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

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**SIGNATURE**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
| | **Coherent Corp.** | **Coherent Corp.** |
| Date: December 16, 2025 | By: | /s/ Sherri Luther |
|  |  | Sherri Luther |
|  |  | Chief Financial Officer and Treasurer |

---

## Exhibit 23.01

**Exhibit 23.01**

**Consent of Independent Registered Public Accounting Firm**

We consent to the incorporation by reference in the following Registration Statements:

1Registration Statement (Form S-8 No. 333-184805) pertaining to the II-VI Incorporated 2012 Omnibus Incentive Plan,

2Registration Statement (Form S-8 No. 333-199855) pertaining to the Amended and Restated II-VI Incorporated 2012 Omnibus Incentive Plan,

3Registration Statement (Form S-8 No. 333-228367) pertaining to the II-VI Incorporated 2018 Employee Stock Purchase Plan,

4Registration Statement (Form S-8 No. 333-228368) pertaining to the II-VI Incorporated 2018 Omnibus Incentive Plan,

5Registration Statement (Form S-8 No. 333-249995) pertaining to the II-VI Incorporated Amended and Restated 2018 Omnibus Incentive Plan,

6Registration Statement (Form S-8 No. 333-266007) pertaining to the Coherent, Inc. 2011 Equity Incentive Plan and Coherent, Inc. Equity Incentive Plan,

7Registration statement (Form S-8 No. 333-274069) pertaining to the Amended and Restated II-VI Incorporated 2005 Deferred Compensation Plan,

8Registration Statement (Form S-8 No. 333-275627) pertaining to the Coherent Corp. Employee Stock Purchase Plan,

9Registration Statement (Form S-8 No. 333-275628) pertaining to the Coherent Corp. Omnibus Incentive Plan,

10Registration Statement (Form S-3 No. 333-258526) pertaining to II-VI Incorporated's common stock and preferred stock,

11Registration Statement (Form S-3 No. 333-266529) pertaining to II-VI Incorporated's common stock and preferred stock,

12Registration Statement (Form S-8 No. 333-281591) pertaining to Coherent Corp.'s common stock, and

13Registration Statement (Form S-8 No. 333-283032) pertaining to Coherent Corp.'s common stock;

of our report dated August 14, 2025 (except for the effects of the reportable segment change disclosed in Notes 1, 3, 6, 14, 20 and 21, as to which the date is December 16, 2025), with respect to the consolidated financial statements and the financial statement schedule of Coherent Corp. and Subsidiaries and our report dated August 14, 2025, with respect to the effectiveness of internal control over financial reporting of Coherent Corp. and Subsidiaries, included in this Current Report (Form 8-K) of Coherent Corp.

/s/ Ernst & Young LLP

Pittsburgh, Pennsylvania

December 16, 2025

## Exhibit 99.1

?xml version='1.0' encoding='ASCII'? iivi-20251216_d2

**Exhibit 99.1**

**PART I** 

**Item 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BUSINESS**

**Definitions**

Coherent Corp. ("Coherent," the "Company," "we," "us," or "our"), is a vertically integrated manufacturing company that develops, manufactures, and markets lasers, transceivers, and other optical and optoelectronic devices, modules, and systems, as well as engineered materials, for use in the communications, industrial, instrumentation and electronics markets. Our headquarters are located at 375 Saxonburg Boulevard, Saxonburg, Pennsylvania 16056, USA. Our telephone number is +1-724-352-4455. Reference to "Coherent," the "Company," "we," "us," or "our" in this Exhibit 99.1 to our Current Report on Form 8-K, unless the context requires otherwise, refers to Coherent Corp. and its wholly owned subsidiaries.

The following defined terms are used in this Exhibit 99.1 to our Current Report on Form 8-K: artificial intelligence (AI); artificial reality (AR); bismuth telluride (Bi2Te3); carbon dioxide (CO2); chemical vapor deposition (CVD); continuous wave (CW); co-packaged optics (CPO); datacenter interconnect (DCI); directly modulated laser (DML); deep ultraviolet (DUV); digital signal processor (DSP); edge-emitting laser (EEL); electron-absorption modulated laser (EML); environmental, social, and governance (ESG); extreme-ultraviolet (EUV) lithography; fifth-generation (5G) wireless; fourth-generation (4G) wireless; gallium arsenide (GaAs); gallium antimonide (GaSb), gallium nitride (GaN); gigabit per second (G); high-definition multimedia interface (HDMI); high-electron-mobility transistor (HEMT); indium phosphide (InP); infrared (IR); integrated circuit (IC); intellectual property (IP); kilowatt (kW); light detection and ranging (LiDAR); light-emitting diode (LED); liquid crystal (LC); liquid crystal on silicon (LCoS); machine learning (ML); metal-oxide-semiconductor field-effect transistor (MOSFET); millimeter (mm); nanometer (nm); near-infrared (NIR); optically pumped semiconductor laser (OPSL); organic light-emitting diode (OLED); original equipment manufacturer (OEM); polymerase chain reaction (PCR); printed circuit board (PCB); radio frequency (RF); reconfigurable optical add/drop multiplexer (ROADM); research and development (R&D); silicon carbide (SiC); terabit per second (T); three-dimensional (3D); two-dimensional (2D); transimpedance amplifier (TIA); ultraviolet (UV); vertical-cavity surface-emitting laser (VCSEL); virtual reality (VR); watt (W); wavelength selective switching (WSS); zinc selenide (ZnSe); and zinc sulfide (ZnS).

**General Description of Business**

Coherent develops, manufactures, and markets lasers, transceivers, and other optical and optoelectronic devices, modules, and systems, as well as engineered materials, for use in communications, industrial, instrumentation and electronics applications. We generate nearly all of our revenues, earnings, and cash flows from developing, manufacturing, and marketing a wide range of products and services for our end markets. Coherent has broad technical expertise and a deep technology stack in areas of importance to our products, including materials growth and fabrication of specialty materials, semiconductor lasers, passive optics including isolators, transceivers, transport equipment, high power lasers for semiconductor capital equipment, display manufacturing, precision manufacturing, and scientific research. Many of our products include custom integrated software that we develop internally, leveraging our deep domain expertise.

**Information Regarding Reporting Segments and Foreign Operations**

Effective July 1, 2025, the Company realigned its organizational structure and now identifies multiple operating segments, which are aggregated into two reportable segments: (i) Datacenter & Communications, and (ii) Industrial. In accordance with ASC 280 "Segment Reporting," the aggregation of the company's segments is based on similarities in economic characteristics, product and service types, production processes, type or class of customers, and distribution methods. Previously, financial results had been reported in the following three segments: (i) Networking, (ii) Materials, and (iii) Lasers. All applicable segment information has been restated to reflect this change.

Financial data regarding our revenues, results of operations, reporting segments, and international sales for the three years ended June 30, 2025, are set forth in the Consolidated Statements of Earnings (Loss) and in Note 14. Segment and Geographic Reporting to our Consolidated Financial Statements, which are included in Item 8 of this Exhibit 99.1 to our Current Report on Form 8-K, and are incorporated herein by reference. We also discuss certain Risk Factors set forth in Item 1A – Risk Factors of our Annual Report on Form 10-K filed August 15, 2025 related to our foreign operations, which are incorporated herein by reference.

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**Global Operations**

Coherent is headquartered in Saxonburg, Pennsylvania, USA, with R&D, manufacturing, and sales facilities worldwide. Our principal U.S. production and R&D operations, in alphabetical order, are located in California, Connecticut, Delaware, New Jersey, Pennsylvania, and Texas. Our principal non-U.S. production and R&D operations, in alphabetical order, are based in China, Finland, Germany, Malaysia, the Philippines, Singapore, South Korea, Sweden, Switzerland, the United Kingdom, and Vietnam. We also utilize contract manufacturers and strategic suppliers. In addition to sales offices co-located at many of our manufacturing sites, we have sales and marketing subsidiaries, in alphabetical order, in Belgium, Canada, France, Israel, Italy, Japan, the Netherlands, and Taiwan. We believe our diverse manufacturing base sets us apart, especially at a time when supply chain resiliency is strongly valued by our customers.

**Human Capital**

Our core values are Integrity, Collaboration, Accountability, Respect, and Enthusiasm, which we refer to by the acronym I CARE. These values define who we are and serve as a guide in how we engage with each other, our customers, our suppliers, our investors, and our environment. They serve as a model for how we grow the Company in an ethical, scalable, and sustainable manner.

*Our People*. We support an inclusive environment in which every individual is considered a valuable member of the team. We listen to the voice of the employee and foster open communication through an open-door policy and engagement surveys, among other methods. This rich feedback allows us to reflect and adjust our internal initiatives across the globe to create a culture that recognizes employees' contributions and values their opinions.

As of June 30, 2025, the Company employed approximately 30,000 employees worldwide.

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| | | |
|:---|:---|:---|
| | **Number of<br>employees** | **Percent of<br>total** |
| Manufacturing | 25210 | 83% |
| Research and development | 2660 | 9% |
| Sales, general and administrative | 2346 | 8% |
| **Total:** | **30216** | **100%** |

---

Globally, as of June 30, 2025, approximately 45% of the workforce are women. Our global footprint is diverse, with approximately 22,340 employees in the Asia-Pacific region, 3,640 in Europe, and 4,236 in the Americas.

*Occupational Health and Safety*. It is our highest priority to keep our employees, customers, and suppliers safe, as the health and safety of our workforce is paramount to the success of our business. We provide our employees upfront and ongoing training to ensure that safety policies and procedures are effectively communicated and implemented. We have experienced employees on-site at each of our manufacturing locations who are tasked with environmental, health, and safety education and compliance. We customize our policies to the local requirements and circumstances of each plant.

*Talent Acquisition, Employee Development, and Learning*. Hiring talented individuals and continuing to develop our employees are critical to our operations. Our Talent Acquisition teams continue their outreach efforts to engage and attract diverse, high-quality talent to our organization. In connection with universities, we are focused on an internship and apprentice program that builds our early career hire talent pool. We have a robust succession-planning process that identifies internal candidates for development to build a talent funnel for our leadership pipelines. We provide all employees the chance to learn and develop critical skills, and we strive to attract, motivate, and retain our talent.

*Total Rewards.* Our Total Rewards offerings are designed to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provide a market-competitive total rewards package that attracts, motivates, rewards, and retains top talent

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Balance fixed costs (benefits and base pay) and variable costs (bonus and equity)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Provide pay for performance, linked to company and individual performance

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Ensure strong governance practices, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Align with the interests of our shareholders

Eligible employees may participate in the Employee Stock Purchase Plan, allowing them to purchase company shares at a discount. Select employees are eligible to receive equity-based awards, to align employee and shareholder interests. We also offer a compelling suite of benefits, including comprehensive health benefits, competitive time-off programs, and employee assistance programs.

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*Inclusion and Belonging*. Coherent respects and upholds the universal values of human rights, which are fundamental to every individual. We hold an expectation for all leaders and employees to engage with one another in a manner that is dignified, fair, and respectful, and we continue to identify ways to highlight different perspectives.

**Manufacturing Processes**

Our success in developing and manufacturing many of our products depends on our ability to tailor the optical and physical properties of technically challenging materials, components, and photonics-based solutions across our target markets. The ability to produce these complex materials, and to control their quality and in-process yields, is an expertise of the Company that is critical to our customers. In the markets we serve, there is a limited number of high-quality suppliers of many of the components we manufacture. Aside from datacenter transceivers, there are very few industry-standard products. Our lasers are displacing conventional technologies because they can do the job faster, yield higher quality, provide overall economic benefits, and enable next-generation applications. Overall, our key differentiators are our deep technology expertise combined with our ability to deliver volume solutions at scale.

We continue to increase our use of renewable energy to power our operations and lower our greenhouse gas footprint. We have on-site solar systems at several facilities that further contribute to our renewable energy efforts. Our team also works to minimize energy usage, water usage, other raw materials usage, and waste generation. Coherent has set as a top priority to reduce its carbon footprint across its global operations. Additional information on the Company's sustainability performance can be found on the ESG section of our website at www.coherent.com. The website address is intended to be an inactive textual reference only. None of the information on, or accessible through, our website is part of this Exhibit 99.1 to our Current Report on Form 8-K or our Annual Report on Form 10-K filed on August 15, 2025, nor is it incorporated herein by reference.

**Sources of Supply**

In our production processes, we use numerous optical, electrical, and mechanical parts that are sourced from third-party suppliers. These include ICs, DSPs, mechanical housings, and optical components, and we commonly refer to them as raw materials. Raw materials or subcomponents required in the manufacturing process are generally available from several sources. However, in the Industrial segment, we currently purchase several key components and materials used in the manufacture of our products, including exotic materials, crystals, and optics, from sole-source or limited-source suppliers. We also purchase assemblies and turnkey solutions from contract manufacturers, based on our proprietary designs. We rely on our own production and design capability to manufacture and specify certain strategic components, crystals, fibers, semiconductor lasers, and laser-based systems. We use rare-earth materials in some of our production processes. Like with other materials, we are constantly working to strengthen and diversify our supply chain for resilience. These strategies include maintaining additional buffer stocks and securing multiple sources to ensure resilience.

The continued high quality of and access to these raw materials are critical to the stability and predictability of our manufacturing yields. We specify and test these raw materials at the onset of and throughout the production process. Additional research and capital investment are sometimes needed to better define future raw materials specifications. We continue to develop strategic second sources as part of our overall business continuity planning, and occasionally experience problems associated with raw materials not meeting contract specifications for quality or purity. Risks associated with reliance on third parties for the timely and reliable delivery of raw materials are discussed in greater detail in Item 1A. Risk Factors of our Annual Report on Form 10-K filed on August 15, 2025.

**Reporting Segments and Business Units**

For fiscal year 2025, the Company reports its results in two reporting segments: (i) Datacenter & Communications, and (ii) Industrial.

The Datacenter & Communications segment leverages our compound semiconductor technology platforms and deep knowledge of end-user applications for its key end markets to deliver differentiated components, modules, and subsystems.

The Industrial segment's lasers and optics products serve industrial customers in both semiconductor and display capital equipment and precision manufacturing, and instrumentation customers in life sciences and scientific instrumentation. It is also a market leader in engineered materials and optoelectronic devices, such as those based on ZnSe, ZnS, GaAs, InP, GaSb, and SiC.

Each of these segments develops and markets key products as described below.

Datacenter & Communications

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Transceivers, systems, subsystems, modules, components, optics, and semiconductor devices for datacenter and communications applications.

Industrial

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Excimer lasers, solid-state lasers, CO2 lasers, and laser systems for a variety of industrial applications, including semiconductor capital equipment, display manufacturing, precision manufacturing, and scientific research.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Laser systems and subsystems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Engineered materials, laser optics, thermoelectric components, and advanced ceramic and metal-matrix composite materials and products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• VCSELs, EELs, pump lasers, high-power lasers for materials processing, and ICs.

**Markets**

For fiscal year 2025, we report revenues of our business segments in the following markets: (i) Datacenter & Communications, and (ii) Industrial. These markets are consistent with the realignment of our organizational structure into two reporting segments which mirror the markets that they report into. The Company realigned its markets from its four former markets: communications, industrial, instrumentation and electronics.

<u>Datacenter & Communications Market Group</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• <u>Datacenter Market Vertical</u>.* We have been experiencing significant growth in AI and ML in the datacom market vertical.

At Coherent, we have a complete portfolio of transceivers matched to the requirements set by AI and ML. These transceivers are protocol-agnostic, meaning the same transceiver hardware can support Ethernet and InfiniBand, as well as proprietary protocols for AI and ML such as NVIDIA's NVLink.

Over the years, we have made strategic investments that give us a unique level of vertical integration. We not only design and manufacture our transceivers internally, but we also design and manufacture many of the materials and components, including lasers, detectors, ICs, and passive optics. We have in-house laser design and manufacturing capability for GaAs-based VCSELs, InP-based DMLs, EMLs, and CW lasers.

Coherent has multiple 6-inch GaAs VCSEL fabs in the U.S. and Europe. We also have multiple InP fabs in the U.S. and Europe, and we are moving to 6-inch wafer capability.

Our portfolio also includes silicon photonics and a broad array of CPO-enabling technologies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• <u>Communications Market Vertical.</u>* Coherent optical communications products and technologies enable next-generation high-speed optical transmission systems and transport networks, and datacenter solutions necessary to meet the accelerating global bandwidth demand.

We are a global technology leader in optical communications, providing materials, subcomponents, components, modules, subsystems, and systems to optical component and module manufacturers, networking equipment manufacturers, datacenter operators, enterprises, and telecom service providers. We design products that meet the increasing demands for network bandwidth and data storage.

Our Telecom products include coherent transmission components and transceivers as well as transport products such as 980 nm and 14xx pump lasers, erbium-doped fiber amplifiers, passive components, OCM, OTDR, ROADM and Optical line systems.

Our proven experience in both transmission and transport allows us to effectively address the emerging DCI market. Our optoelectronic components, transceivers, submodules, pluggable amplifiers, and configurable line cards are able to meet the requirements of low power consumption, compactness, ease of installation and operation, and cost savings, which are often mandatory features in the DCI market.

<u>Industrial Market Group</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *<u>Precision Manufacturing Market Vertical.</u>* Our Precision Manufacturing vertical encompasses a broad range of applications across very diverse markets. With complete verticality, from materials to turnkey laser solutions, we intersect with any industrial laser process within the application areas of automotive manufacturing, medical device manufacturing, machine tools, consumer goods, and industrial electrical and electronics. Our portfolio of optics, components, lasers, and systems enables a wide variety of applications including EV battery welding, fine processing of medical devices, additive manufacturing, high-temperature superconducting wires and tapes, and even bleaching of jeans.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *<u>Semiconductor Capital Equipment Market Vertical.</u>* Semiconductor capital equipment requires advanced materials to meet the need for tighter tolerances, enhanced thermal stability, faster wafer transfer speeds, and reduced stage settling times. Our metal-matrix composites and reaction-bonded ceramics enable these applications, thanks to their optimum combination of light weight, strength, hardness, and coefficient of thermal expansion.

Our lasers are widely used in various semiconductor processes such as solid-state lasers and excimer lasers for semiconductor inspection tasks, and CO2 lasers for wafer annealing. We also offer a suite of lasers for a variety of advanced packaging applications, ranging from cutting, PCB and substrate drilling, and optical debonding to numerous laser marking tasks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• <u>Display Capital Equipment Market Vertical.</u>* Our excimer laser-based annealing systems can improve precision, combining high-spatial precision and selectivity for LTPS OLED display production. Our CO2 lasers and UV ultrashort-pulsed lasers are used for cutting applications. Beyond OLED, we are offering UV and DUV laser solutions for a broad range of applications to manufacture next-generation microLED displays.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• <u>Aerospace & Defense Market Vertical.</u>* Coherent aerospace and defense solutions enable mission-critical capabilities for applications in high-energy lasers; contested space; and intelligence, surveillance, and reconnaissance. Our Aerospace & Defense division maintains separate business development, IT infrastructure, accounting, finance, engineering, and manufacturing facilities in the United States with strictly controlled access; the division is dedicated to our U.S. government-supported contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *<u>Life Sciences Market Vertical.</u>* Within the life sciences end market, we focus on instrumentation that integrates light- and/or thermal-management solutions. We vertically integrate from the material level (with various crystals for medical laser applications, or ZnS materials for NIR and IR spectroscopy) to high-precision components, complex subassemblies, and even full subsystems. Applications within the biotechnology segment include research and diagnostic tools such as flow cytometry, genome sequencing, and PCR, to name a few. Our broad product portfolio delivers solutions covering illumination, light management, thermal management, sample loading, and detection. Visible-wavelength lasers and multicolored laser and LED engines provide low-noise, high-performance, reliable light sources.

Medical applications comprise instrumentation that is used in the direct treatment of patients and includes medical lasers, imaging, point-of-care wearables, and thermal-based treatment solutions. Coherent semiconductor laser bars and stacks are used in applications such as hair and wrinkle removal, and femtosecond lasers combined with excimer lasers are used for common procedures like LASIK.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *<u>Scientific Research Market Vertical</u>.* Our products include CW lasers for microscopy, advanced ultrafast-pulsed laser sources, and high-energy pulsed excimer gas lasers. These systems are sold to universities and research institutions across the globe for applications such as neuroscience and optogenetics.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• <u>Consumer Electronics Market Vertical.</u>* We manufacture GaAs VCSELs and VCSEL arrays, InP edge-emitting lasers and photo diodes, as well as specialty glass wafers for the consumer electronics market. Our VCSEL products leverage our world-class 6-inch GaAs platform, combining our epitaxial wafer growth and wafer fabrication capabilities. Our VCSELs are also widely deployed in datacenters and HDMI optical cables as well as in vehicle steering wheels. Today, Coherent is one of the very few vertically integrated 6-inch VCSEL manufacturers with a proven track record in high-volume manufacturing of high-reliability, large multi-emitter VCSEL arrays designed for 3D sensing. We are also one of the very few companies that have shipped InP diode lasers and photodiodes in high volume for consumer electronics applications; these are also manufactured in-house. An increasing number of consumer devices are coming on the market with embedded VCSELs, including multiple smartphones and tablets, AR/VR headsets, smart watches, and household robots.

In addition to VCSELs, our products for the consumer electronics market include wafer-scale optics, diffraction gratings, thermoelectric coolers, driver ICs, and substrates for sensing and AR/VR applications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• <u>Automotive Market Vertical.</u>* We are a global leader in SiC substrates for power electronics that improve the energy efficiency of electric and hybrid-electric vehicles. Our industry-leading semiconductor lasers, optics, and materials can be leveraged for LiDAR systems embedded in advanced driver-assistance systems (ADAS) for autonomous vehicles. LiDAR sensors enable ADAS to perform functions such as emergency braking, distance warning, and adaptive cruise control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *<u>Wireless Market Vertical.</u>* We are a market leader in the technology development and large-volume manufacturing of 100 mm, 150 mm, and the industry's first 200 mm semi-insulating SiC substrates. These substrates are utilized by customers worldwide to manufacture GaN-on-SiC HEMT RF power amplifier devices that are embedded in remote radio heads in 4G and 5G wireless base stations.

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**Sales and Marketing**

We market our products and services through a direct sales force and through representatives and distributors around the world. Our market strategy is focused on understanding our customers' requirements and building market awareness and acceptance of our products and services. New products are continually being developed and introduced to our new and established customers in all markets.

We have centralized our worldwide sales and strategic marketing functions. Sales offices have been aligned to best serve and distribute products to our worldwide customer base.

Our sales force develops effective communications with our OEM and end-user customers worldwide. Products are actively marketed through key account relationships, personal selling, select advertising, attendance at trade shows, digital marketing, and customer partnerships. Our sales force includes a highly trained technical sales support team to assist customers in designing, testing, and qualifying our products as key components of our customers' systems.

We do business with a number of customers in the aerospace and defense industry, who in turn generally contract with a governmental entity, typically a U.S. government agency.

We had two customers who each contributed more than 10% of revenue during fiscal 2025.

**Competition**

Coherent is a global leader in many of its product families. We compete, in part, on our core competencies from materials to systems, our differentiated products and services, and the sustainability of our competitive advantages. We also compete by using our intellectual property, ability to scale, product quality, on-time delivery, and technical support. We believe that our vertical integration, manufacturing facilities and equipment, experienced technical and manufacturing employees, and worldwide marketing and distribution channels provide us with competitive advantages. In addition to competitors who manufacture products similar to those we produce, there are other technologies and products available that may compete with our technologies and products.

**Our Strategy**

Our strategy is to grow businesses with world-class lasers, optics, and engineered materials to advance our current customers' strategies, reach new markets through innovative technologies and platforms, and enable new applications in large and growing markets. A key strategy of ours is to develop and manufacture high-performance materials and, in certain cases, components incorporating those materials, that are differentiated from those produced by our competitors. We focus on providing components that are critical to the heart of our customers' products that serve the applications mentioned above.

We continue to grow the number and size of our key accounts. A significant portion of our business is based on sales orders with market leaders, which enables our forward planning and production efficiencies. We intend to continue capitalizing and executing on this proven model, participating effectively in the growth of the markets discussed above, and continuing our focus on operational excellence as we execute our primary business strategies.

**Research and Development**

During the fiscal year ended June 30, 2025, we continued to identify, invest in, and focus our R&D on new products and platform technologies for the long term growth of the Company.

We devote significant resources to R&D programs directed at the continuous improvement of our existing products and processes, and to the timely development of new materials, technologies, platforms, and products. We believe that our R&D activities are essential to establishing and maintaining a leadership position in each of the markets we serve. In addition, certain manufacturing personnel support or participate in our R&D efforts on an ongoing basis. We believe the close interaction between the development and manufacturing functions enhances the direction of our projects, reducing costs and accelerating technology transfers. It also offers development opportunities to our employees.

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During the fiscal year ended June 30, 2025, we focused our R&D investments in the following areas:

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| | |
|:---|:---|
| **Datacenter & Communications** | **Datacenter & Communications** |
| &nbsp;&nbsp;&nbsp;**Area of Development:** | &nbsp;&nbsp;&nbsp;**Our R&D Investments:** |
| &nbsp;&nbsp;&nbsp;Photonics design | &nbsp;&nbsp;Continue to develop and improve crystal materials, precision optical parts, and laser device components for photonics applications. |
| &nbsp;&nbsp;Datacom transceivers and components for datacom transceivers | &nbsp;&nbsp;800G/1.6T transceivers, CPO, VCSELs, EMLs, silicon photonics, ICs, isolators, and thermoelectric coolers; 400G/lane components supporting 3.2T and 6.4T. |
| &nbsp;&nbsp;&nbsp;Optical circuit switch (OCS) | &nbsp;&nbsp;Develop the OCS product family for AI/ML and hyperscale datacenters based on our digital liquid-crystal technology. |
| &nbsp;&nbsp;&nbsp;Coherent transceivers | &nbsp;&nbsp;Drive further integration to reduce size and power consumption; increase bandwidth to enable 100G/200G/400G/800G coherent transceivers. |
| &nbsp;&nbsp;&nbsp;Pump lasers | &nbsp;&nbsp;Continue to invest in our next-generation GaAs pump laser portfolio to address evolving terrestrial and undersea markets. |
| &nbsp;&nbsp;&nbsp;Advanced optics manufacturing | &nbsp;&nbsp;High-precision and more compact optics and automated assembly platforms and packages. |
| &nbsp;&nbsp;&nbsp;High-power lasers and semiconductor lasers | &nbsp;&nbsp;&nbsp;Increase output power and reliability of EEL diodes, VCSELs, InP lasers, and detectors for a variety of applications across our markets. |

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| | |
|:---|:---|
| **Industrial** | **Industrial** |
| &nbsp;&nbsp;&nbsp;**Area of Development:** | &nbsp;&nbsp;&nbsp;**Our R&D Investments:** |
| &nbsp;&nbsp;&nbsp;Diode-pumped solid-state lasers | &nbsp;&nbsp;Continue to develop solid-state lasers for industrial applications for materials processing, instrumentation, and scientific applications. |
| &nbsp;&nbsp;&nbsp;Ultrafast fiber lasers | &nbsp;&nbsp;Continue to develop industrial femtosecond fiber lasers for semiconductor capital equipment and display manufacturing. |
| &nbsp;&nbsp;&nbsp;Femtosecond oscillators and amplifiers | &nbsp;&nbsp;Continue to develop ultrafast laser systems for scientific applications. |
| &nbsp;&nbsp;Optically pumped semiconductor lasers  | &nbsp;&nbsp;Continue to broaden the product portfolio of CW, visible, and ultraviolet OPSLs. |
| &nbsp;&nbsp;&nbsp;Semiconductor lasers | &nbsp;&nbsp;Increase output power of GaAs- and InP-based edge-emitting semiconductor lasers for laser pumping, and industrial applications. |
| &nbsp;&nbsp;&nbsp;Excimer lasers and excimer laser tools | &nbsp;&nbsp;Continue to support existing excimer laser-based applications in display manufacturing, instrumentation, and materials processing.  |
| &nbsp;&nbsp;CO2 lasers | &nbsp;&nbsp;Continue to develop CO2 lasers used in industrial applications. |
| &nbsp;&nbsp;&nbsp;Laser tools | &nbsp;&nbsp;Continue to develop laser-based tools used for marking, cutting, and welding applications. |
| &nbsp;&nbsp;SiC epitaxial wafers | &nbsp;&nbsp;Continuous improvement to maintain world-class, high-quality, large-diameter substrates and epitaxial wafers; develop SiC epitaxial wafers. |
| &nbsp;&nbsp;&nbsp;Thermoelectric materials and devices | &nbsp;&nbsp;Continue to develop leading Bi2Te3 materials for thermoelectric cooling/heating; focus on thermoelectric power-generation capability in order to introduce new products. |

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R&D expenditures were $582 million, $479 million, and $500 million for the fiscal years 2025, 2024, and 2023, respectively.

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**Import and Export Compliance**

We are required to comply with all relevant import/export and economic sanctions laws and regulations, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The import regulations administered by U.S. Customs and Border Protection;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The International Traffic in Arms Regulations (ITAR) administered by the U.S. Department of State, Directorate of Defense Trade Controls, which among other things impose licensing requirements on the export from the United States of certain defense articles and defense services, generally including items that are specially designed or adapted for a military application and/or listed on the United States Munitions List;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Export Administration Regulations (EAR) administered by the U.S. Department of Commerce, Bureau of Industry and Security, which among other things impose licensing requirements on certain dual-use goods, technology, and software; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The regulations administered by the U.S. Department of the Treasury, Office of Foreign Assets Control, implementing economic sanctions against designated countries, governments, and persons based on U.S. foreign policy and national security considerations.

Foreign governments also have similar import and export controls, sanctions, laws, and regulations. For additional discussion regarding our import, export, and sanctions compliance, see the discussion in Item 1A. Risk Factors of our Annual Report on Form 10-K filed on August 15, 2025.

**Trade Secrets, Patents, and Trademarks**

Our use of trade secrets, proprietary know-how, trademarks, copyrights, patents, contractual confidentiality, and IP ownership provisions helps us develop and maintain our competitive position with respect to our products and manufacturing processes. We aggressively pursue process and product patents in certain areas of our businesses and in certain jurisdictions across the globe. We have entered into selective IP licensing agreements. We have confidentiality and noncompetition agreements with certain personnel. We require our U.S. employees to sign a confidentiality and noncompetition agreement upon commencement of their employment with us. As of June 30, 2025, we had a total of approximately 3,100 patents globally.

**Executive Officers of the Registrant**

The executive officers of the Company and their respective ages and positions as of June 30, 2025, are set forth below. Each executive officer listed has been appointed by the Board of Directors to serve until removed or until a successor is appointed and qualified.

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| | | |
|:---|:---|:---|
| **<u>Name</u>** | **<u>Age</u>** | **<u>Position</u>** |
| Jim Anderson | 52 | Chief Executive Officer |
| Giovanni Barbarossa | 62 | Chief Strategy Officer |
| Sherri Luther | 60 | Chief Financial Officer and Treasurer |
| Christopher Koeppen | 53 | Chief Innovation Officer |
| Julie Sheridan Eng | 58 | Chief Technology Officer |
| Rob Beard | 47 | Chief Legal and Global Affairs Officer & Secretary |
| Ilaria Mocciaro | 54 | Chief Accounting Officer |

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**Jim Anderson** was appointed Chief Executive Officer ("CEO") of Coherent Corp. and a member of the Board of Directors on June 3, 2024. He brings over 25 years of experience in the technology and semiconductor industries, with a strong track record in innovation-driven businesses. Prior to joining Coherent, Mr. Anderson served as President and Chief Executive Officer of Lattice Semiconductor Corporation from September 2018 to 2024. Before Lattice, he was the Senior Vice President and General Manager of the Computing and Graphics Business Group at Advanced Micro Devices, Inc. (AMD). Earlier in his career, he held various leadership roles across general management, engineering, sales, marketing, and corporate strategy at Intel, Broadcom (formerly Avago Technologies), and LSI Corporation. Mr. Anderson currently serves on the Board of Directors of Applied Materials, Inc., where he was appointed in July 2025. He previously served on the Board of Directors of Entegris, Inc., (March 2023–July 2024), the Semiconductor Industry Association (until June 2024), and Sierra Wireless (April 2020–January 2023). He also sits on the Americas Executive Board for the MIT Sloan School of Management and the U.S.-Japan Business Council. Mr. Anderson earned an MBA and Master of Science degree in electrical engineering and computer science from the Massachusetts Institute of Technology, a Master of Science degree in electrical engineering from Purdue University, and a bachelor's degree in electrical engineering from the University of Minnesota.

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**Giovanni Barbarossa** joined Coherent Corp. in 2012 and has been the Chief Strategy Officer of the Company since 2019. From 2019 to 2025, he was also President of the former Materials Segment. From 2012 to 2019, Dr. Barbarossa was the Chief Technology Officer of the Company and President of the former Laser Solutions Segment. Previously, Dr. Barbarossa was the President and Chief Executive Officer of Avanex Corporation until its merger with Bookham plc. into Oclaro, Inc., of which he was a member of the Board of Directors from 2009 to 2012. Before joining Avanex pre-IPO, Dr. Barbarossa had management responsibilities at British Telecom Labs, AT&T Bell Labs, Lucent Technologies, and Hewlett-Packard. Dr. Barbarossa holds 118 U.S. patents and has published over 100 papers. He graduated cum laude from the University of Bari, Italy, with a B.S. in electrical engineering, and has a Ph.D. in photonics from the University of Glasgow, U.K.

**Sherri Luther** was named Chief Financial Officer ("CFO") of Coherent Corp. in September 2024. Ms. Luther joined Coherent from Lattice Semiconductor, where she had been CFO since 2019. Prior to Lattice, Ms. Luther worked at Coherent, Inc., for 16 years, including as Corporate Vice President of Finance. Ms. Luther has more than 30 years of strategic and financial operations experience, with expertise in financial reporting, forecasting, internal audit, M&A, treasury, investor relations, operations, and global supply chain management. Previously, Ms. Luther held senior finance and accounting roles at companies including Quantum, Ultra Network Technologies, and Arthur Andersen. Ms. Luther is a Certified Public Accountant (CPA) and graduated from the Executive MBA Program at Stanford University Graduate School of Business. She holds a bachelor's degree in business administration, with a dual major in accounting and finance, from Wright State University. She serves on the Board of Directors of Silicon Labs and is also NACD (National Association of Corporate Directors) Directorship Certified.

**Christopher Koeppen** joined Coherent Corp. in 2011 via the acquisition of Aegis Lightwave, Inc., where he served as General Manager, Aegis-NJ. He was named General Manager of the Company's Agile Network Products Division in 2012 and Director of Corporate Strategic Technology Planning in 2015. Dr. Koeppen then served as Vice President of the Industrial Laser Group and Corporate Strategic Technology Planning from 2017 until his appointment as Chief Technology Officer in 2019. He became Senior Vice President, Aerospace & Defense, and Chief Innovation Officer in 2022 and was named Executive Vice President of Aerospace & Defense in 2025. Previously, Dr. Koeppen was co-founder and CEO of CardinalPoint Optics, prior to its acquisition by Aegis Lightwave. He has more than two decades of progressively increasing general and technology management experience in high-tech companies, including at Meriton Networks, Mahi Networks, Photuris, and Lucent Technologies. Dr. Koeppen holds a Ph.D. in physics from the University of Pennsylvania, where he was an AT&T Bell Laboratories Scholar, and B.S. degrees in physics and mathematics from the Pennsylvania State University.

**Julie Sheridan Eng** was named Chief Technology Officer ("CTO") of Coherent in 2022. Prior to becoming CTO, Dr. Eng served as Senior Vice President and General Manager of the Optoelectronic Devices and Modules Business Unit. In that role, she oversaw engineering, product management, and operations for GaAs vertical-cavity surface-emitting lasers (VCSELs), InP directly modulated lasers (DMLs) and detectors, and CMOS/BiCMOS integrated circuits for datacom and 3D sensing applications. Before Coherent, Dr. Eng held various senior management positions at Finisar Corporation, including Executive Vice President and General Manager of 3D Sensing, and Executive Vice President of Datacom Engineering. Over the 15 years that she managed datacom transceiver engineering, her teams production-released hundreds of fiber-optic transceiver products and achieved numerous industry firsts. Dr. Eng began her career at AT&T Bell Laboratories/Lucent/Agere, where she led the development of laser-based datacom transceivers. Dr. Eng is a Past Chair of the IEEE Committee on Women in Engineering and currently serves on the Board of Directors of Optica (formerly the Optical Society of America). She has published over a dozen papers, co-authored a book chapter, holds six U.S. patents, and has given numerous invited talks. In 2022, she was named an Optica Fellow for distinguished contributions to the advancement of optics and photonics, and in 2025 she was elected to the National Academy of Engineering. Dr. Eng holds a B.A. degree summa cum laude in physics from Bryn Mawr College and a B.S. degree in electrical engineering with honors from the California Institute of Technology (Caltech). She earned M.S. and Ph.D. degrees in electrical engineering from Stanford University.

**Rob Beard** brings more than 20 years of senior international experience across the business, policy, and legal worlds to his role as Chief Legal and Global Affairs Officer for Coherent Corp. Mr. Beard joined Coherent in 2024 from Mastercard, where he was Chief Legal and Global Affairs Officer. While at Mastercard, he led the company's global legal, government affairs, and policy teams, and served on Mastercard's Management Committee. Mr. Beard came to Mastercard after a nearly decade-long tenure at Micron Technology, during which time he held various roles on the legal team and ultimately served as General Counsel and Corporate Secretary. While at Micron, he played a key role in promoting the U.S. CHIPS and Science Act and in negotiating an incentive package from the state of New York for Micron's announced $100 billion semiconductor manufacturing facility to be built in the Syracuse area. After clerking on the U.S. Court of Appeals for the Ninth Circuit, Mr. Beard began his corporate legal career as an associate in Shearman & Sterling LLP's London office, before moving to Weil, Gotshal & Manges LLP. He graduated from the University of Utah and received his Juris Doctor from the University of Illinois College of Law, summa cum laude. Mr. Beard has also taught in the University of Illinois Communications Department, at the University of Illinois College of Law, and at the S.J. Quinney College of Law at the University of Utah.

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**Ilaria Mocciaro** is a seasoned finance executive and active Certified Public Accountant (CPA) in Illinois with over 27 years of experience across public and corporate accounting. She has held senior leadership roles at multiple Fortune 500 companies, overseeing global finance functions including accounting, tax, treasury, SEC reporting, and financial systems. Ms. Mocciaro is currently the Chief Accounting Officer and Corporate Controller for Coherent Corp. She joined Coherent in 2023 from CDW, where she was Vice President, Chief Accounting Officer, and Controller from 2020 to 2022. From 2016 to 2020, she was Senior Vice President, Chief Accounting Officer, and Global Controller at Anixter International Inc., where she helped close the sale of Anixter to Wesco. From 2011 to 2016, Ms. Mocciaro was the Chief Accounting Officer of the agricultural and construction equipment segments at CNH Industrial N.V., after serving as Director of Accounting and Reporting. She led Internal Audit at McMaster-Carr Supply Company from 2010 to 2011 and previously held several management positions at Ernst & Young LLP in Chicago and Milan, Italy, from 1997 to 2010. Ms. Mocciaro holds a B.A. degree in accounting and business administration from the Catholic University of the Sacred Heart (Università Cattolica del Sacro Cuore) in Milan.

**Availability of Information**

Our internet address is www.coherent.com. Information contained on our website is not part of, and should not be construed as being incorporated by reference into, this Exhibit 99.1 to our Current Report on Form 8-K. We post the following reports on our website as soon as reasonably practical after they are electronically filed with or furnished to the SEC: our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, and any amendments to those reports or statements filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. In addition, we post our proxy statements on Schedule 14A related to our annual shareholders' meetings as well as reports filed by our directors, officers, and 10% beneficial owners pursuant to Section 16 of the Exchange Act. In addition, all filings are available via the SEC's website (www.sec.gov). We also make our corporate governance documents available on our website, including the Company's Code of Ethical Business Conduct, Governance Guidelines, and the charters for our board committees. All such documents are located on the Investors page of our website and are available free of charge.

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**PART II**

**Item 7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to provide a reader of Coherent's financial statements with a narrative from the perspective of management. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and related notes included under Item 8 of this report. Coherent's MD&A is presented in the following sections:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Overview

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Trends and Other Matters Affecting our Business

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Critical Accounting Policies and Estimates

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** Fiscal Year 2025 Compared to Fiscal Year 2024

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**•** Fiscal Year 2024 Compared to Fiscal Year 2023

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Liquidity and Capital Resources

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Off Balance Sheet Arrangements

Forward-looking statements in Item 7 may involve risks and uncertainties that could cause results to differ materially from those projected (refer to Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2025 filed on August 15, 2025 for discussion of these risks and uncertainties, which are incorporated herein by reference).

**Overview**

For an overview of our business, see Part I - Item 1. Business - General Description of Business in this Current Report on Form 8-K for further information.

**Trends and Other Matters Affecting our Business**

*Industry Conditions*

Throughout fiscal 2025, we experienced stronger demand in our Communications market. The increase in the number of hyperscale and other cloud customers building AI datacenters and in the number and size of their AI datacenter buildouts drove demand for our datacenter transceivers. Strong demand for our new ZR/ZR+ transceiver products along with growing demand for traditional telecom transport products drove increased volumes for our telecom and other communications solutions.

Additionally, within our Industrial market, we were able to grow our industrial lasers products and services revenue in the face of relatively weak overall industrial end demand. Our revenue growth in these portions of the Industrial market is a result of our focus on higher demand applications within the Industrial market, including display and semiconductor capital equipment.

*Restructuring Plans* 

<u>2023 Plan</u>

On May 23, 2023, the Board of Directors approved the 2023 Plan which includes site consolidations, facilities moves and closures, as well as the relocation and requalification of certain manufacturing facilities. These restructuring actions were intended to realign our cost structure as part of a transformation to a simpler, more streamlined, resilient and sustainable business model.

In fiscal 2025, these activities resulted in charges of $53 million, primarily for impairment losses associated with the sale of our Newton Aycliffe business, impairment of right-of-use ("ROU") assets, employee termination costs, site move costs and accelerated depreciation. In fiscal 2024, these activities resulted in charges of $27 million, primarily for accelerated depreciation, the write-off of property and equipment, and site move costs. In fiscal 2023, these activities resulted in $119 million of charges primarily for employee termination costs, and the write-off of property and equipment, net of $65 million from reimbursement arrangements. See Note 20. Restructuring Plans to the Company's Consolidated Financial Statements included in Item 8 of this Exhibit 99.1 to our Current Report on Form 8-K for further information.

<u>2025 Plan</u>

Commencing in the quarter ended March 31, 2025, and as part of the ongoing strategic review of the Company's business, the Company's management approved the 2025 Plan to take a number of restructuring actions, including site consolidations, facilities moves and closures, workforce reductions, contract terminations, and certain other associated cost reductions.

In fiscal 2025, these activities resulted in $107 million of charges primarily for the write-off of property and equipment and ROU assets, employee and contract termination costs. We expect the restructuring actions to be substantially completed by the

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end of fiscal 2026. However, the actual timing and costs associated with these restructuring actions may differ from our current expectations and estimates and such differences may be material.

*Synergy and Site Consolidation Plan*

On May 20, 2023, the Company announced that it had accelerated some of the actions planned as part of its multi-year synergy and site consolidation efforts following the acquisition of Coherent, Inc., including site consolidations and relocations to lower cost sites. These relocations and other actions resulted in the Company achieving its previously announced $250 million synergy plan, which included savings from supply chain management, internal supply of enabling materials and components, operational efficiencies in all functions due to scale, global functional model efficiencies and consolidation of corporate costs. In fiscal 2025, the acceleration of these activities resulted in $17 million of charges primarily for overlapping labor related to transition of manufacturing operations to other sites, shut down costs and employee termination costs. In fiscal 2024, the acceleration of these activities resulted in $40 million of charges primarily for overlapping labor related to transition of manufacturing operations to other sites, shut down costs for sites being exited, accelerated depreciation and employee termination costs. In fiscal 2023, the acceleration of these activities resulted in $20 million in charges primarily for employee termination costs, the write-off of inventory for products that have been exited and shut down costs.

*Impairment of Assets Held-for-Sale*

In the fourth quarter of fiscal 2025, management entered into non-binding agreements to sell several entities. As a result of classifying these entities as held-for-sale, we recorded non-cash impairment charges of $85 million to Impairment of assets held-for-sale in our Consolidated Statements of Earnings (Loss) in the fourth quarter of fiscal 2025 to reduce our carrying value in these entities to fair value. See Note 21. Assets Held-for-Sale to the Company's Consolidated Financial Statements included in Item 8 of this Exhibit 99.1 to our Current Report on Form 8-K for further information.

*Macroeconomic Conditions - Tariffs*

In early 2025, the United States implemented significant new tariffs on foreign imports impacting multiple countries, commodities and industries, and these new tariffs and export restrictions also prompted retaliatory tariffs and export restrictions from certain countries. As of June 2025, certain tariffs and retaliatory tariffs have been delayed, but a number of the new tariffs remain in effect, including significant tariffs and trade sanctions between the United States and China. China has also restricted the export of certain rare earth minerals which are used in our products.

These tariffs, trade sanctions, and/or restrictions on the export of certain rare earth minerals which are used in our products did not have a material impact on our business, financial condition, operational results and/or cash flows in fiscal 2025 nor do we expect them to have a material impact on our business, financial condition, operational results and/or cash flows in fiscal 2026.

As a global company with a substantial and diversified manufacturing footprint our diverse manufacturing footprint provides us with some insulation against these tariffs, trade sanctions, and other geopolitical challenges. Our geographically diverse supply chain combined with the internal production of many of our most critical technology in-feeds provides adaptability and optionality that benefits our customers. As the tariff, trade sanctions, and export restrictions become more clear, we expect these attributes will enable us to find opportunities to moderate their impact. However, we are in a dynamic geopolitical environment, and we are not immune to any sustained disruption in global trade conditions which may create future headwinds for the Company and could result in revenue reduction, cost increases on material used in our products or significant production delays, which could adversely affect our business, financial condition, operational results and cash flows.

**Critical Accounting Policies and Estimates**

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires the Company's management to make judgments, assumptions and estimates that affect the amounts reported in its Consolidated Financial Statements and accompanying notes. Note 1. Nature of Business and Summary of Significant Accounting Policies, of the Notes to our Consolidated Financial Statements contained in Item 8 of this Exhibit 99.1 to our Current Report on Form 8-K, describes the significant accounting policies and accounting methods used in the preparation of the Company's Consolidated Financial Statements. Management bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates.

Management has discussed the development and selection of the critical accounting policies and estimates described below with the Audit Committee of the Board of Directors and the Audit Committee has reviewed the related disclosure. In addition, there are other items within our Consolidated Financial Statements that require estimation but are not deemed critical. Changes in estimates used in these and other items could impact the Consolidated Financial Statements.

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*Goodwill* 

We test goodwill for impairment annually, and when events or changes in circumstances indicate that goodwill might be impaired. The determination of whether goodwill is impaired requires us to make judgments based on long-term projections of future performance. Estimates of fair value are based on our projection of revenues, operating costs and cash flows of each reporting unit, considering historical and anticipated results and general economic and market conditions and their projections. For fiscal year 2025, we performed a quantitative assessment. The fair values of the reporting units were determined using a discounted cash flow analysis with projected financial information based on our most recently completed long-term strategic planning processes and also considers the current financial performance compared to our prior projections of the reporting units, as well as a market analysis. Determination of the fair value requires discretion and the use of estimates by management. If actual results are not consistent with management's estimates and assumptions, a material goodwill impairment charge could occur, which could have a material adverse effect on our consolidated financial statements.

Due to the cyclical nature of our business, and the other factors described in the section on Risk Factors set forth in Item 1A of the Company's Annual Report on Form 10-K filed on August 15, 2025, the profitability of our individual reporting units may periodically be affected by downturns in customer demand, operational challenges and other factors. If material adverse conditions occur that impact one or more of our reporting units, our determination of future fair value might not support the carrying amount of one or more of our reporting units, and the related goodwill would need to be impaired. We will continue to monitor any changes to our assumptions and will evaluate goodwill as deemed warranted during future periods.

*Income Taxes*

The Company prepares and files tax returns based on its interpretation of tax laws and regulations and records estimates based on these judgments and interpretations. In the normal course of business, the Company's tax returns are subject to examination by various taxing authorities, which may result in future tax, interest and penalty assessments by these authorities. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The amount of unrecognized tax benefits is adjusted for changes in facts and circumstances. For example, adjustments could result from significant amendments to existing tax law and the issuance of regulations or interpretations by the taxing authorities, new information obtained during a tax examination, or resolution of an examination. The Company believes that its estimates for uncertain tax positions are appropriate and sufficient to pay assessments that may result from examinations of its tax returns. The Company recognizes both accrued interest and penalties related to unrecognized tax benefits in income tax expense.

Management evaluates the realizability of deferred tax assets for each jurisdiction in which it operates. If the Company experiences cumulative pretax income in a particular jurisdiction in a three-year period including the current and prior two years, management normally concludes that the income tax assets will more likely than not be realizable and no valuation allowance is recognized, unless known or planned operating developments, or changes in tax laws, would lead management to conclude otherwise. However, if the Company experiences cumulative pretax losses in a particular jurisdiction in a three-year period, management then considers a series of factors in the determination of whether the deferred tax assets can be realized. The Company has recorded valuation allowances against certain of its deferred tax assets, primarily those that have been generated from net operating losses in certain foreign taxing jurisdictions and acquired U.S. carryforwards. In evaluating whether the Company would more likely than not recover these deferred tax assets, it has not assumed any future taxable income or tax planning strategies in the jurisdictions associated with these carryforwards where history does not support such an assumption. Implementation of tax planning strategies to recover these deferred tax assets or future income generation in these jurisdictions could lead to the reversal of these valuation allowances and a reduction of income tax expense.

The OECD, a global policy forum, introduced a framework to implement a global minimum tax of 15% which would apply to multinational corporations, referred to as Pillar Two. Nearly all OECD member jurisdictions have agreed in principle to adopt these provisions and numerous jurisdictions have enacted legislation, including jurisdictions where the Company operates, with a subset of the rules becoming effective for our fiscal year beginning on July 1, 2024, and the remaining rules becoming effective for our fiscal year beginning on July 1, 2025, or in later periods. The Company is continuing to analyze the Pillar Two rules as countries implement additional legislation. Implementation of the OECD proposal may have a material impact on the Company's Consolidated Financial Statements in the future.

**Fiscal Year 2025 Compared to Fiscal Year 2024**

The Company reports its financial results in the following two designated segments: (i) Datacenter & Communications, and (ii) Industrial. The Company is reporting financial information (revenue through segment profit) for these reporting segments in this Exhibit 99.1 to our Current Report on Form 8-K.

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The following table sets forth select items from our Consolidated Statements of Earnings (Loss) for the years ended June 30, 2025 and 2024 ($ in millions except per share information) <sup>(1)</sup>:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended June 30, 2025** | **Year Ended June 30, 2025** | **Year Ended June 30, 2024** | **Year Ended June 30, 2024** |
| | | **% of<br>Revenues** | | **% of<br>Revenues** |
| Total revenues | $5810 | 100% | $4708 | 100% |
| Cost of goods sold | 3767 | 65 | 3252 | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross margin | 2043 | 35 | 1456 | 31 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 582 | 10 | 479 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | 926 | 16 | 854 | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restructuring charges | 160 | 3 | 27 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment of assets held-for-sale | 85 | 1 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest and other, net | 196 | 3 | 244 | 5 |
| Earnings (loss) before income taxes | 94 | 2 | (148) | (3) |
| Income tax expense | 64 | 1 | 11 |  |
| Net earnings (loss) | 30 | 1 | (159) | (3) |
| Net loss attributable to noncontrolling interests | (19) |  | (3) |  |
| Net earnings (loss) attributable to Coherent Corp. | $49 | 1% | $(156) | (3)% |
| Diluted earnings (loss) per share | $(0.52) |  | $(1.84) |  |

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<sup>(1)</sup> Some amounts may not add due to rounding.

***Consolidated***

**Revenues.** Revenues for the year ended June 30, 2025 increased 23% to $5,810 million, compared to $4,708 million for the prior fiscal year.

Revenues increased $1,124 million, or 43%, in the Datacenter & Communications market, with increases in datacom driven primarily by ongoing strong AI datacenter demand and growth in our telecom revenue due to higher demand in the data center interconnect and the telecom transport markets. In our Industrial market, revenue decreased $21 million, or 1%. Within this market, revenue growth in display capital equipment and in semiconductor capital equipment volumes was more than offset by soft demand due to the macroeconomic environment in broad-based industrial end markets, including decreases in demand in our Silicon Carbide business, which was consistent with softer end market demand in the automotive market.

**Gross margin.** Gross margin for the year ended June 30, 2025 was $2,043 million, or 35%, of total revenues, compared to $1,456 million, or 31% of total revenues, for fiscal 2024, an increase of 424 basis points. The increase as a percent of revenue for fiscal 2025 was primarily due to higher revenue volume particularly in the communications market in the Datacenter & Communications segment, improvements in both pricing optimization and cost reductions, partially offset by unfavorable mix and foreign exchange impacts. Cost reductions included both lower manufacturing costs and improvements in manufacturing yields.

**Research and development.** Research and development ("R&D") expenses for the fiscal year ended June 30, 2025 were $582 million, or 10% of revenues, compared to $479 million, or 10% of revenues, last fiscal year. The increase of $103 million for fiscal 2025 was primarily related to continued investment in our product portfolios, particularly in datacom. We continue to focus on investing our R&D in those projects with the highest return-on-investment.

**Selling, general and administrative.** Selling, general and administrative ("SG&A") expenses for the year ended June 30, 2025 were $926 million, or 16% of revenues, compared to $854 million, or 18% of revenues, last fiscal year. The decrease in SG&A as a percentage of revenue for fiscal 2025 compared to fiscal 2024 was primarily the result of higher sales volumes and lower executive transition costs partially offset by the impact of higher variable and share-based compensation.

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**Restructuring charges.** Restructuring charges for the year ended June 30, 2025 were $160 million, or 3% of revenues. The restructuring charges consisted primarily of asset write-offs, employee termination costs, move costs, contract termination costs and accelerated depreciation due to the consolidation and closure of certain manufacturing sites as well as impairment losses associated with the sale of our Newton Aycliffe business. Restructuring charges related to our 2023 Restructuring Plan for the year ended June 30, 2024 were $27 million, or 1% of revenues, and consisted primarily of severance, accelerated depreciation, equipment write-offs and move costs due to the consolidation of certain manufacturing sites. See Note 20. Restructuring Plans to the Company's Consolidated Financial Statements included in Item 8 of this Exhibit 99.1 to our Current Report on Form 8-K for further information.

**Impairment of assets held-for-sale.** Impairment of assets held-for-sale for the year ended June 30, 2025 were $85 million, or 1% of revenues and represented non-cash impairment charges to reduce our carrying value in entities held-for-sale at June 30, 2025 to fair value. See Note 21. Assets Held-for-Sale to the Company's Consolidated Financial Statements included in Item 8 of this Exhibit 99.1 to our Current Report on Form 8-K for further information.

**Interest and other, net.** Interest and other, net for the year ended June 30, 2025 was expense of $196 million compared to expense of $244 million last fiscal year, a decrease of $48 million. Included in Interest and other, net, were interest expense on borrowings, foreign currency gains and losses, amortization of debt issuance costs, equity gains and losses from unconsolidated investments, interest and dividend income on excess cash balances and income from an insurance settlement. The decrease of $48 million in comparison to fiscal 2024 was driven by driven by $45 million lower interest expense, $8 million higher interest income and $8 million higher income from insurance settlements partially offset by $19 million higher foreign exchange net losses. The $45 million lower interest expense was primarily due to lower interest expense on our New Term B Loans resulting from lower balances and lower interest rates partially offset by lower interest expense benefit from our interest rate cap and swap. The $8 million higher interest and dividend income is primarily due to increases in interest rates earned on investments as well as the increase in average restricted cash balances due to the timing of receipt from our investment in Silicon Carbide LLC in the second quarter of fiscal 2024. The $19 million higher foreign exchange net losses were primarily due to higher volatility of exchange rates, particularly the Euro, during fiscal 2025 in addition to the cessation of our balance sheet hedging program at the end of September 2024.

**Income taxes.** Our effective income tax rate for fiscal 2025 was 68%, compared to an effective tax rate of (8)% last fiscal year. The difference between our effective tax rate and the U.S. statutory rate of 21% was due to tax rate differentials between U.S. and foreign jurisdictions. The fiscal 2025 rate was impacted by the classification of assets held for sale and an increase in the U.S. valuation allowance.

**Net loss attributable to noncontrolling interests.** Net loss attributable to noncontrolling interests for the year ended June 30, 2025 was $19 million, compared to $3 million last fiscal year and represents the noncontrolling interest holders' shares of losses of Silicon Carbide LLC. See Note 11. Noncontrolling Interests to the Company's Consolidated Financial Statements included in Item 8 of this Exhibit 99.1 to our Current Report on Form 8-K for further information.

***Segment Reporting***

Revenues and segment profit for the Company's reportable segments are discussed below. During the first quarter of fiscal 2025 as a result of a new CEO joining the Company in the fourth quarter of fiscal 2024, our Chief Operating Decision Maker ("CODM") implemented changes in the measure he uses to allocate resources and assess performance. Our CODM now evaluates each segment's performance and allocates resources based on segment revenue and segment profit, instead of operating income, as our CODM believes segment profit is a more comprehensive profitability measure for each operating segment. Segment profit includes operating expenses directly managed by operating segments, including research and development, direct sales, marketing and administrative expenses. Segment profit does not include share-based compensation, acquisition or integration related costs, amortization and impairment of acquisition-related intangible assets, restructuring charges, impairment charges on assets held-for-sale, gain on sale of businesses and certain other charges. Additionally, we do not allocate Corporate strategic research and development, strategic marketing and sales expenses and shared general and administrative expenses, as these expenses are not directly attributable to our operating segments. Management believes segment profit to be a useful measure for investors, as it reflects the results of segment performance over which management has direct control and is used by management in its evaluation of segment performance. See Note 14. Segment and Geographic Reporting to the Company's Consolidated Financial Statements included in Item 8 of this Exhibit 99.1 to our Current Report on Form 8-K for further information on the Company's reportable segments and for the reconciliation of the Company's segment profit to earnings (loss) before income taxes, which is incorporated herein by reference.

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Effective July 1, 2025, we realigned our organizational structure and identified multiple operating segments which have been aggregated into two reportable segments based on our internal management structure and CODM oversight: (i) Datacenter & Communications, and (ii) Industrial. The change in our operating segments had no impact on our previously reported consolidated results of operations, financial condition, or cash flows. The change in our operating segment measure in fiscal 2025 had no impact on our previously reported consolidated results of operations, financial condition, or cash flows. Comparative prior year segment information has been recast to reflect these changes.

***Datacenter & Communications ($ in millions)***

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended<br>June 30,** | **Year Ended<br>June 30,** | **% Increase** |
| | **2025** | **2024** | |
| Revenues | $3755 | $2631 | 43% |
| Segment profit | $904 | $500 | 81% |

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Revenues for the year ended June 30, 2025 for Datacenter & Communications increased 43% to $3,755 million, compared to $2,631 million for last fiscal year. The increase in revenues of $1,124 million during fiscal 2025 was primarily due to increased AI datacenter related revenue in our Datacenter & Communications market resulting from increased volumes in the datacom vertical and growth in the telecom vertical due to increased demand in data center interconnect and the telecom transport market.

Segment profit for the year ended June 30, 2025 for Datacenter & Communications increased 81% to $904 million, compared to segment profit of $500 million last fiscal year. The increase in segment profit for fiscal 2025 was driven by $1,124 million higher revenues partially offset by higher R&D investments in our product portfolio.

***Industrial ($ in millions)***

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended<br>June 30,** | **Year Ended<br>June 30,** | **% Increase (Decrease)** |
| | **2025** | **2024** | |
| Revenues | $2055 | $2076 | (1)% |
| Segment profit | $407 | $298 | 37% |

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Revenues for the fiscal year ended June 30, 2025 for Industrial decreased 1% to $2,055 million, compared to revenues of $2,076 million last fiscal year. The decrease in revenues during the current fiscal year was primarily related to weak automotive and Silicon Carbide end market demand and macroeconomic conditions in the industrial market, partially offset by $73 million higher shipments of laser systems in our display capital equipment market.

Segment profit for the fiscal year ended June 30, 2025 for Industrial increased 37%, with segment profit of $407 million in the current year, compared to segment profit of $298 million last fiscal year. The increase in segment profit during the current fiscal year was primarily driven by favorable product mix, improvements in pricing optimization, lower manufacturing costs and lower SG&A expenses, partially offset by higher R&D investments in our product portfolio and higher variable compensation.

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**Fiscal Year 2024 Compared to Fiscal Year 2023**

The following table sets forth select items from our Consolidated Statements of Earnings (Loss) for the years ended June 30, 2024 and 2023 ($ in millions except per share information) <sup>(1)</sup>:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** |
| | **June 30, 2024** | **June 30, 2024** | **June 30, 2023** | **June 30, 2023** |
| | | **% of<br>Revenues** | | **% of<br>Revenues** |
| Total revenues | $4708 | 100% | $5160 | 100% |
| Cost of goods sold | 3252 | 69 | 3542 | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross margin | 1456 | 31 | 1618 | 31 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Research and development | 479 | 10 | 500 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative | 854 | 18 | 1037 | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restructuring charges | 27 | 1 | 119 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest and other, net | 244 | 5 | 318 | 6 |
| Loss before income taxes | (148) | (3) | (356) | (7) |
| Income tax expense (benefit) | 11 |  | (96) | (2) |
| Net loss | (159) | (3) | (259) | (5) |
| Net loss attributable to noncontrolling interests | (3) |  |  |  |
| Net loss attributable to Coherent Corp. | $(156) | (3)% | $(259) | (5)% |
| Diluted loss per share | $(1.84) |  | $(2.93) |  |

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<sup>(1)</sup> Some amounts may not add due to rounding.

***Consolidated***

**Revenues.** Revenues for the year ended June 30, 2024 decreased 9% to $4,708 million, compared to $5,160 million for fiscal 2023.

Revenues decreased in both markets, with the largest decline, $335 million, or 11%, in the Datacenter & Communications market, primarily due to decreased volumes in the telecom vertical as our communications service provider customers continued to work down their inventory levels with reduced capital spending, partially offset by increased shipments in the datacom vertical driven by increased AI-related datacom shipments. In addition, revenues decreased $117 million, or 5%, in the Industrial market primarily from lower demand for sensing products and other consumer applications in the consumer electronics vertical, largely due to a design change implemented by a significant electronics customer, and due to lower demand in the life sciences, precision manufacturing and semiconductor and display capital equipment verticals primarily due to macroeconomic conditions.

**Gross margin.** Gross margin for the year ended June 30, 2024 was $1,456 million, or 31%, of total revenues, compared to $1,618 million, or 31% of total revenues, for fiscal 2023, a slight decrease of 43 basis points. During fiscal 2023, the Company recorded $158 million in Cost of goods sold related to the fair value adjustment on acquired inventory from the acquisition of Coherent, Inc. ("Merger"). Gross margin, excluding the fair value adjustment on acquired inventory, decreased 349 basis points for fiscal 2024 compared to fiscal 2023 primarily due to lower revenues, less favorable sales mix especially in the datacom vertical in the Datacenter & Communications market, underutilized operating capacity in several plants, shut down costs related to site consolidations, lower yields in the datacom vertical, higher costs related to product lines that are being exited, higher inventory provisions and the unfavorable foreign exchange rates.

**Research and development.** R&D expenses for the fiscal year ended June 30, 2024 were $479 million, or 10% of revenues, compared to $500 million, or 10% of revenues, for fiscal 2023. The decrease of $21 million for fiscal 2024 is due to both segments and was driven by lower costs due to the consolidation of sites and our efforts to control costs. The R&D expenses are primarily related to our continued investment in new products and platform technologies in an effort to accelerate our organic growth across all of our businesses, including significant investments in datacom transceivers for AI, indium phosphide and gallium arsenide semiconductor lasers, silicon carbide materials, and lasers for display processing, semiconductor capital equipment, and instrumentation.

**Selling, general and administrative.** Selling, general and administrative ("SG&A") expenses for the year ended June 30, 2024 were $854 million, or 18% of revenues, compared to $1,037 million, or 20% of revenues, for fiscal 2023. The decrease in SG&A as a percentage of revenue for fiscal 2024 compared to fiscal 2023 was primarily the result of lower amortization

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expense of $117 million resulting from (1) the Merger, as backlog intangibles were fully amortized in fiscal 2023, (2) lower amortization for tradenames impaired in the fourth quarter of fiscal 2023, and (3) $31 million charges for impairment of certain tradename and customer list intangibles assets in fiscal 2023. In addition, SG&A decreased due to lower charges related to the Merger, including $39 million lower transaction fees and financing, and lower one-time expense of $18 million related to share-based compensation resulting from the Merger, as well as lower costs due to the consolidation of sites and our efforts to control costs, partially offset by the impact of lower revenues.

**Restructuring Charges.** Restructuring charges related to our 2023 Plan for the year ended June 30, 2024 were $27 million, or 1% of revenues, and consist primarily of accelerated depreciation, equipment write-offs and move costs due to the consolidation of certain manufacturing sites. Restructuring charges related to our 2023 Plan for the year ended June 30, 2023 were $119 million, or 2% of revenues, and consisted of severance and equipment write-offs, net of reimbursements, due to the consolidation of certain manufacturing sites. See Note 20. Restructuring Plans to the Company's Consolidated Financial Statements included in Item 8 of this Exhibit 99.1 to our Current Report on Form 8-K for further information.

**Interest and other, net.** Interest and other, net for the year ended June 30, 2024 was expense of $244 million compared to expense of $318 million for fiscal 2023, a decrease of $75 million. Included in Interest and other, net, were interest expense on borrowings, Merger financing fees (fiscal 2023), foreign currency gains and losses, amortization of debt issuance costs, equity gains and losses from unconsolidated investments, and interest income on excess cash balances. The decrease of $75 million in comparison to fiscal 2023 was driven by driven by $39 million incremental interest and dividend income due to increases in interest and dividend rates earned on investments, as well as the increase in restricted cash balances and $35 million incurred in the prior year related to financing of the Merger. In addition, interest expense increased $2 million due to higher interest rates on our Term facilities, net of higher benefit from our interest rate cap and swap.

**Income taxes.** Our effective income tax rate for fiscal 2024 was (8)%, compared to an effective tax rate of 27% for fiscal 2023. The difference between our effective tax rate and the U.S. statutory rate of 21% was due to the establishment of a valuation allowance related to certain US deferred tax assets.

**Net loss attributable to noncontrolling interests.** Net loss attributable to noncontrolling interests for the year ended June 30, 2024 was $3 million, and represents the noncontrolling interest holders' shares of losses of Silicon Carbide LLC after the close of the transaction on December 4, 2023. See Note 11. Noncontrolling Interests to the Company's Consolidated Financial Statements included in Item 8 of this Exhibit 99.1 to our Current Report on Form 8-K for further information.

***Segment Reporting***

For a discussion of revenues and segment profit measures, refer to our disclosure under "Segment Reporting" within "Fiscal Year 2025 Compared to Fiscal Year 2024" above.

Comparative prior year segment information has been recast to conform to the new segments, including the fiscal 2025 new segment profitability measure. The change in our operating segments, including segment profitability measure, had no impact on our previously reported consolidated results of operations, financial condition, or cash flows.

***Datacenter & Communications ($ in millions)***

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended<br>June 30,** | **Year Ended<br>June 30,** | **%<br>Decrease** |
| | **2024** | **2023** | |
| Revenues | $2631 | $2966 | (11)% |
| Segment profit | $500 | $704 | (29)% |

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Revenues for the year ended June 30, 2024 for Datacenter & Communications decreased 11% to $2,631 million, compared to $2,966 million for fiscal year 2023. The decrease in revenues of $335 million during fiscal 2024 was primarily due to decreased volumes year-over-year in the telecom vertical as our communications service provider customers continue to work down their inventory levels with reduced capital spending, partially offset by increases in the datacom vertical driven by increased AI-related datacom transceivers shipments, both within the Datacenter & Communications market.

Segment profit for the year ended June 30, 2024 for Datacenter & Communications decreased 29% to $500 million, compared to segment profit of $704 million for fiscal year 2023. The decrease in segment profit for fiscal 2024 was driven by $335 million lower revenues and lower margin percentage. The margin percentage was lower than fiscal 2023 due to less favorable sales mix in the datacom vertical, the impact of fixed manufacturing costs as a percentage of revenues on lower revenues in the telecom vertical, lower yields in the datacom vertical and higher inventory provisions related to products that are being exited.

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***Industrial ($ in millions)***

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended<br>June 30,** | **Year Ended<br>June 30,** | **%<br>Decrease** |
| | **2024** | **2023** | |
| Revenues | $2076 | $2194 | (5)% |
| Segment profit | $298 | $407 | (27)% |

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Revenues for the fiscal year ended June 30, 2024 for Industrial decreased 5% to $2,076 million, compared to revenues of $2,194 million for fiscal year 2023. The decrease in revenues during fiscal 2024 was primarily from lower volumes in the consumer electronics vertical, largely due to a design change implemented by a significant electronics customer, decreased volumes in the life sciences vertical from continued inventory digestion by our customers and decreased shipments in the precision manufacturing vertical primarily due to macroeconomic conditions. Revenues also decreased due to lower demand in the semiconductor and display capital equipment verticals.

Segment profit for the fiscal year ended June 30, 2024 for Industrial decreased 27%, with segment profit of $298 million in fiscal 2023, compared to segment profit of $407 million for fiscal year 2023. The decrease in segment profit during fiscal 2024 was driven by $117 million lower revenues as well as lower gross margin percentage due to less favorable mix, higher costs for sites being shutdown and higher inventory provisions.

**Liquidity and Capital Resources**

Historically, our primary sources of cash have been provided from operations, long-term borrowings, and advance funding from customers. Other sources of cash include proceeds from the issuance of equity, proceeds received from the exercises of stock options, and sale of equity investments and businesses. Our historic uses of cash have been for business acquisitions, capital expenditures, investments in research and development, payments of principal and interest on outstanding debt obligations, payments of debt and equity issuance costs to obtain financing and payments in satisfaction of employees' minimum tax obligations. Supplemental information pertaining to our sources and uses of cash for the periods indicated is presented as follows:

***Sources (uses) of cash (in millions):***

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| | | | |
|:---|:---|:---|:---|
| **Year Ended June 30,** | **2025** | **2024** | **2023** |
| Net cash provided by operating activities | $634 | $546 | $634 |
| Net proceeds from debt and equity issuances, including noncontrolling interest holders |  | 968 | 1358 |
| Proceeds from exercises of stock options and purchases of stock under employee stock purchase plan | 50 | 42 | 24 |
| Proceeds from long-term borrowings and revolving credit facilities | 54 | 19 | 3715 |
| Proceeds from the sale of business | 27 |  |  |
| Payments on Convertible Debt and Finisar Notes |  |  | (4) |
| Cash paid for dividends | (11) |  | (28) |
| Debt issuance costs |  |  | (127) |
| Purchases of businesses, net of cash acquired |  |  | (5489) |
| Effect of exchange rate changes on cash and cash equivalents and other items | 76 | (1) | (4) |
| Other investing and financing | (1) | (5) | (5) |
| Payments in satisfaction of employees' minimum tax obligations | (54) | (22) | (54) |
| Payments on existing debt and revolving credit facilities | (489) | (248) | (1330) |
| Additions to property, plant & equipment | (441) | (347) | (436) |

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*Net cash provided by operating activities:*

Net cash provided by operating activities was $634 million during the current fiscal year ended June 30, 2025 compared to $546 million of cash provided by operating activities during the same period last fiscal year. The increase in cash flows provided by operating activities during the year ended June 30, 2025 compared to the same period last fiscal year was primarily due to higher earnings partially offset by increases in accounts receivables and inventories as a result of higher revenues.

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Net cash provided by operating activities was $546 million and $634 million for the fiscal years ended June 30, 2024 and 2023, respectively. The decrease in cash flows provided by operating activities during the fiscal year ended June 30, 2024 compared to the fiscal year ended June 30, 2023 was primarily due to lower non-cash adjustments partially offset by lower losses.

*Net cash used in investing activities:*

Net cash used in investing activities was $414 million for the fiscal year ended June 30, 2025, compared to net cash used of $351 million for the same period last fiscal year. Higher cash used to fund capital expenditures of $94 million year-over-year was partially offset by $27 million cash received from the sale of a business.

Net cash used in investing activities was $0.4 billion and $5.9 billion for the fiscal years ended June 30, 2024 and 2023, respectively. In fiscal 2023, $5.5 billion was used to fund the Merger. Cash used to fund capital expenditures decreased by $89 million during the fiscal year ended June 30, 2024 compared to the fiscal year ended June 30, 2023.

*Net cash provided by (used in) financing activities:*

Net cash used in financing activities was $452 million for the fiscal year ended June 30, 2025, compared to net cash provided by financing activities of $758 million for the same period last fiscal year. Cash outflows for the current fiscal year were primarily payments on existing debt. Financing inflows in the prior year included the $1.0 billion contribution from noncontrolling interests and proceeds from employee stock purchases, partially offset by payments on existing debt and equity issuance costs related to the contribution from noncontrolling interests.

Net cash provided by financing activities was $758 million for the year ended June 30, 2024 compared to net cash provided by financing activities of $3,554 million for the year ended June 30, 2023. Financing inflows in fiscal 2024 included the $1.0 billion contribution from noncontrolling interests and proceeds from employee stock purchases, partially offset by payments on existing debt and equity issuance costs related to the contribution from noncontrolling interests. Cash inflows for fiscal 2023 were from borrowings under the New Term Facilities, defined below, as well the net proceeds from the issuance of Coherent's Series B-2 Convertible Preferred Stock. Financing outflows included payments to settle the Company's existing senior credit facilities.

***Senior Credit Facilities***

On July 1, 2022, Coherent entered into a Credit Agreement by and among the Company, the lenders, and other parties thereto, and JP Morgan Chase Bank, N.A., as administrative agent and collateral agent, which provides for senior secured financing of $4.0 billion, consisting of a term loan A credit facility (the "Term A Facility"), with an aggregate principal amount of $850 million, a term loan B credit facility (the "Term B Facility" and, together with the Term A Facility, the "Term Facilities"), with an aggregate principal amount of $2,800 million, and a revolving credit facility (the "Revolving Credit Facility" and, together with the Term Facilities, the "Senior Credit Facilities"), in an aggregate available amount of $350 million, including a letter of credit sub-facility of up to $50 million. On March 31, 2023, Coherent entered into Amendment No. 1 to the Credit Agreement, which replaced the adjusted LIBOR-based rate of interest therein with an adjusted Secured Overnight Financing Rate ("SOFR") based rate of interest. As amended, the Term A Facility and the Revolving Credit Facility each bear interest at an adjusted SOFR rate subject to a 0.10% floor plus a range of 1.75% to 2.50%, based on the Company's total net leverage ratio. The Term A Facility and the Revolving Credit Facility borrowings bear interest at adjusted SOFR plus 1.85% as of June 30, 2025. On April 2, 2024, Coherent entered into Amendment No. 2 to the Credit Agreement, under which the principal amount of term B loans outstanding under the Credit Agreement (the "Existing Term B Loans") were replaced with an equal amount of new term loans (the "New Term B Loans") having substantially similar terms as the Existing Term B Loans, except with respect to the interest rate applicable to the New Term B Loans and certain other provisions. On January 2, 2025, Coherent entered into Amendment No. 3 to the Credit Agreement, under which the principal amount of the New Term B Loans were replaced with an equal amount of new term loans (the "New Term B-2 Loans") having substantially similar terms as the New Term B Loans, except with respect to the interest rate applicable to the New Term B-2 Loans and certain other provisions. As further amended, the New Term B-2 Loans bear interest at a SOFR rate (subject to a 0.50% floor) plus 2.00% as of June 30, 2025. The maturity of the New Term B-2 Loans and revolving credit facility remains unchanged. In relation to the Term Facilities, the Company incurred expense of $192 million for the fiscal year ended June 30, 2025, which is included in Interest expense in the Consolidated Statements of Earnings (Loss). On July 1, 2023, our interest rate cap became effective, which together with our interest rate swap (through September 30, 2024), reduced interest expense by $32 million during the fiscal year ended June 30, 2025.

During the fiscal year ended June 30, 2025, the Company made payments of $433 million for the Term Facilities, including voluntary prepayments of $400 million.

As of June 30, 2025, the Company had no borrowings outstanding under the Revolving Credit Facility.

***Weighted Average Interest Rate***

------

The weighted average interest rate of total borrowings was 6% and 7% for the years ended June 30, 2025 and 2024, respectively.

Our cash position, borrowing capacity and debt obligations are as follows (in millions):

---

| | | |
|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2024** |
| Cash and cash equivalents | $909 | $926 |
| Restricted cash, current | 9 | 174 |
| Restricted cash, non-current | 715 | 690 |
| Available borrowing capacity under Revolving Credit Facility | 315 | 346 |
| Total debt obligations | 3687 | 4100 |

---

***Other Liquidity***

On December 4, 2023, the Company completed two investment agreements under which Silicon Carbide LLC, a Company subsidiary, received $1.0 billion cash in exchange for 25% of the equity of that entity. Such funds have and will continue to be used primarily to fund future capital expansion in our silicon carbide business and will enable us to increase our available free cash flow to provide greater financial and operational flexibility to execute our capital allocation priorities. See Note 11. Noncontrolling Interests to the Company's Consolidated Financial Statements included in Item 8 of this Exhibit 99.1 to our Current Report on Form 8-K for further information.

The Company believes existing cash, cash flow from operations, and available borrowing capacity from its Senior Credit Facilities will be sufficient to fund its needs for working capital, capital expenditures, repayment of scheduled long-term borrowings and lease obligations, investments in R&D, and internal and external growth objectives at least through fiscal year 2026.

Our cash and cash equivalent balances are generated and held in numerous locations throughout the world, including amounts held outside the United States. As of June 30, 2025, we held approximately $813 million of cash, cash equivalents and restricted cash outside of the United States. Generally, cash balances held outside the United States could be repatriated to the United States.

At June 30, 2025, we had $724 million of restricted cash, which includes $720 million at our Silicon Carbide LLC that is restricted for use by only that subsidiary.

**Off-Balance Sheet Arrangements**

We have no off-balance sheet arrangements as defined by Regulation S-K of the Securities Act of 1933.

***Contractual Obligations***

As of June 30, 2025, in the ordinary course of business, we had total estimated purchase commitments from vendors of approximately $1,092 million. In addition, as of June 30, 2025, we had obligations under our operating leases of approximately $263 million, $58 million of which will be paid in the fiscal year 2026.

------

**Item 8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

------

**MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING**

**Management's Responsibility for Preparation of the Financial Statements**

Management is responsible for the preparation of the Consolidated Financial Statements included in this Annual Report on Form 10-K. The Consolidated Financial Statements were prepared in accordance with the accounting principles generally accepted in the United States of America and include amounts that are based on the best estimates and judgments of management. The other financial information contained in this Annual Report on Form 10-K is consistent with the Consolidated Financial Statements.

**Management's Report on Internal Control Over Financial Reporting**

Management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rules 13a-159f) and 15(d)-15(f). The Company's internal control system is designed to provide reasonable assurance concerning the reliability of the financial data used in the preparation of the Company's Consolidated Financial Statements, as well as reasonable assurance with respect to safeguarding the Company's assets from unauthorized use or disposition.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement presentation and other results of such systems.

Management conducted an evaluation of the effectiveness of the Company's internal control over financial reporting as of June 30, 2025. In making this evaluation, management used the criteria set forth by the *Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013)*. Management's evaluation included reviewing the documentation of its controls, evaluating the design effectiveness of controls and testing their operating effectiveness. Based on the evaluation, management concluded that as of June 30, 2025, the Company's internal controls over financial reporting were effective.

Ernst & Young LLP, an independent registered public accounting firm, has issued its report on the effectiveness of our internal control over financial reporting as of June 30, 2025, which report is included herein.

------

**Report of Independent Registered Public Accounting Firm**

To the Shareholders and the Board of Directors of Coherent Corp.

**Opinion on the Financial Statements** 

We have audited the accompanying consolidated balance sheets of Coherent Corp. and subsidiaries (the Company) as of June 30, 2025 and 2024, the related consolidated statements of earnings (loss), comprehensive income (loss), shareholders' equity and mezzanine equity and cash flows for each of the three years in the period ended June 30, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated August 14, 2025 expressed an unqualified opinion thereon.

**Basis for Opinion** 

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matter**

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

------

---

| | |
|:---|:---|
| ***Goodwill Impairment Assessment - Lasers Reporting Unit*** | ***Goodwill Impairment Assessment - Lasers Reporting Unit*** |
| *Description of the Matter* | At June 30, 2025, the balance of the Company's goodwill related to the Lasers reporting unit was $3.2 billion. As discussed in Note 1 to the consolidated financial statements, goodwill is reviewed annually for impairment, or more frequently if impairment indicators arise. The assessment of goodwill for impairment requires a comparison of the fair value of each reporting unit that has goodwill associated with its operations to its carrying amount, including goodwill. If the Company's carrying amount of a reporting unit exceeds its fair value, an impairment loss would be measured as the excess of the carrying value over the calculated fair value.<br>Auditing the Company's annual goodwill impairment test for the Lasers reporting unit is complex because it involves making assumptions about the timing and amount of the forecasted future net cash flows of the reporting unit. The fair value estimate can be sensitive to significant assumptions such as revenue and the selected discount rate, which is based on a risk-adjusted weighted average cost of capital. These significant assumptions are forward looking and could be impacted by future economic conditions. |
| *How We Addressed the Matter in Our Audit* | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's goodwill impairment evaluation process, including controls over management's review of the assumptions described above.<br>Our audit procedures to test management's impairment evaluation of the Lasers reporting unit included, among others, assessing the valuation methodology and assumptions discussed above, and the underlying data used to develop such assumptions. For example, we compared certain assumptions to current industry, market and economic trends. Where appropriate, we evaluated whether changes to the Company's business and other factors would affect the assumptions. We also assessed the historical accuracy of management's estimates and performed independent sensitivity analyses. We involved our valuation specialists to assist us in evaluating the methodologies and auditing the assumptions used to calculate the estimated fair value of the Lasers reporting unit. |

---

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2008.

Pittsburgh, Pennsylvania

August 14, 2025, except for the effects of the reportable segment changes disclosed in Notes 1, 3, 6, 14, 20 and 21, as to which the date is December 16, 2025.

------

**Report of Independent Registered Public Accounting Firm**

To the Shareholders and the Board of Directors of Coherent Corp.

**Opinion on Internal Control Over Financial Reporting** 

We have audited Coherent Corp. and subsidiaries' internal control over financial reporting as of June 30, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Coherent Corp. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of June 30, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of June 30, 2025 and 2024, the related consolidated statements of earnings (loss), comprehensive income (loss), shareholders' equity and mezzanine equity and cash flows for each of the three years in the period ended June 30, 2025, and the related notes and schedule listed in the Index at Item 15(a)(2) and our report dated August 14, 2025 expressed an unqualified opinion thereon.

**Basis for Opinion** 

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

**Definition and Limitations of Internal Control Over Financial Reporting** 

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Pittsburgh, Pennsylvania

August 14, 2025

------

**Coherent Corp. and Subsidiaries**

**Consolidated Balance Sheets**

***($000)***

---

| | | |
|:---|:---|:---|
| **June 30,** | **2025** | **2024** |
| **Assets** |  |  |
| **Current Assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $909200 | $926033 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash, current | 8897 | 174008 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable - less allowance for doubtful accounts of $12,189 and $9,511 at June 30, 2025 and June 30, 2024, respectively | 964051 | 848542 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | 1437636 | 1286404 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid and refundable income taxes | 55773 | 26909 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid and other current assets | 551597 | 398203 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Current Assets** | 3927154 | 3660099 |
| Property, plant & equipment, net | 1877507 | 1817259 |
| Goodwill | 4471084 | 4464329 |
| Other intangible assets, net | 3204747 | 3503247 |
| Deferred income taxes | 53407 | 40966 |
| Restricted cash, non-current | 714816 | 689645 |
| Other assets | 662221 | 313089 |
| **Total Assets** | $14910936 | $14488634 |
| **Liabilities, Mezzanine Equity and Equity** |  |  |
| **Current Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of long-term debt | $188306 | $73770 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 846984 | 631548 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation and benefits | 258650 | 212458 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating lease current liabilities | 41575 | 40580 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued income taxes payable | 123762 | 90705 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other accrued liabilities | 335564 | 294706 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Current Liabilities** | 1794841 | 1343767 |
| Long-term debt | 3498615 | 4026448 |
| Deferred income taxes | 711717 | 784374 |
| Operating lease liabilities | 165162 | 162355 |
| Other liabilities | 259318 | 225411 |
| **Total Liabilities** | 6429653 | 6542355 |
| **Mezzanine Equity** |  |  |
| Series B redeemable convertible preferred stock, no par value, 5% cumulative; issued - 215,000 shares at June 30, 2025 and June 30, 2024; redemption value - $2,540,110 and $2,427,860 as of June 30, 2025 and June 30, 2024, respectively | 2483261 | 2364772 |
| **Shareholders' Equity** |  |  |
| Common stock, no par value; authorized - 300,000,000 shares; issued - 171,849,325 shares at June 30, 2025; issued - 168,406,323 shares at June 30, 2024 | 5056168 | 4857657 |
| Accumulated other comprehensive income (AOCI) | 372037 | 2640 |
| Retained earnings | 584374 | 664940 |
|  | 6012579 | 5525237 |
| Treasury stock, at cost - 16,294,119 shares at June 30, 2025 and 15,626,740 shares at June 30, 2024 | (368065) | (315122) |
| **Total Coherent Corp. Shareholders' Equity** | 5644514 | 5210115 |
| Noncontrolling interests (NCI) | 353508 | 371392 |
| **Total Equity** | 5998022 | 5581507 |
| **Total Liabilities, Mezzanine Equity and Equity** | $14910936 | $14488634 |

---

*See Notes to Consolidated Financial Statements*

------

**Coherent Corp. and Subsidiaries**

**Consolidated Statements of Earnings (Loss)**

---

| | | | |
|:---|:---|:---|:---|
| **Year Ended June 30,** | **2025** | **2024** | **2023** |
| *($000, except per share data)* |  |  |  |
| Revenues | $5810115 | $4707688 | $5160100 |
| Costs, Expenses and Other Expense (Income) |  |  |  |
| Cost of goods sold | 3766793 | 3251724 | 3541817 |
| Research and development | 581924 | 478788 | 499603 |
| Selling, general and administrative | 926451 | 854001 | 1036699 |
| Restructuring charges | 160081 | 27054 | 119101 |
| Impairment of assets held-for-sale | 84988 |  |  |
| Interest expense | 243251 | 288475 | 286872 |
| Other (income) expense, net | (47554) | (44707) | 31566 |
| Total Costs, Expenses and Other Expense | 5715934 | 4855335 | 5515658 |
| Earnings (Loss) Before Income Taxes | 94181 | (147647) | (355558) |
| Income Tax Expense (Benefit) | 64124 | 11117 | (96100) |
| Net Earnings (Loss) | 30057 | (158764) | (259458) |
| Net Loss Attributable to Noncontrolling Interests | (19307) | (2610) |  |
| Net Earnings (Loss) Attributable to Coherent Corp. | 49364 | (156154) | (259458) |
| Less: Dividends on Preferred Stock | 129926 | 123357 | 144212 |
| Net Loss Available to the Common Shareholders | $(80562) | $(279511) | $(403670) |
| Basic Loss Per Share | $(0.52) | $(1.84) | $(2.93) |
| Diluted Loss Per Share | $(0.52) | $(1.84) | $(2.93) |

---

*See Notes to Consolidated Financial Statements*

------

**Coherent Corp. and Subsidiaries**

**Consolidated Statements of Comprehensive Income (Loss)**

---

| | | | |
|:---|:---|:---|:---|
| **Year Ended June 30,** | **2025** | **2024** | **2023** |
| *($000)* |  |  |  |
| Net Earnings (Loss) | $30057 | $(158764) | $(259458) |
| Other Comprehensive Income (Loss): |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | 409069 | (81889) | 87927 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of interest rate instruments, net of taxes of $(5406), $(5468) and $8,056 for the years ended June 30, 2025, 2024 and 2023, respectively | (31898) | (20196) | 30071 |
| &nbsp;&nbsp;&nbsp;&nbsp;Pension adjustment, net of taxes of ($1543), ($1718) and ($1682) for the years ended June 30, 2025, 2024, and 2023, respectively | (6351) | (7443) | (6105) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income (loss) | 370820 | (109528) | 111893 |
| Comprehensive Income (Loss) | 400877 | (268292) | (147565) |
| Comprehensive Loss Attributable to Noncontrolling Interests | (19307) | (2610) |  |
| Foreign Currency Translation Adjustments Attributable to Noncontrolling Interests | 1423 | 429 |  |
| Comprehensive Income (Loss) Attributable to Coherent Corp. | $418761 | $(266111) | $(147565) |

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*See Notes to Consolidated Financial Statements*

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**Coherent Corp. and Subsidiaries**

**Consolidated Statements of Shareholders' Equity and Mezzanine Equity**

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Common Stock** | **Common Stock** | **Preferred Stock** | **Preferred Stock** | | | **Treasury Stock** | **Treasury Stock** | | | **Mezzanine Equity** | **Mezzanine Equity** |
| | **Shares** | **Amount** | **Shares** | **Amount** |<br>&nbsp;&nbsp;**AOCI** |<br>**Retained <br>Earnings** | **Shares** | **Amount** |<br>**NCI** |<br>**Total** | **Preferred Shares** | **Amount** |
| *(000, including share amounts)* |  |  |  |  |  |  |  |  |  |  |  |  |
| **Balance - June 30, 2022** | 120923 | $2064552 | 2300 | $445319 | $(2167) | $1348125 | (13973) | $(239354) | $— | $3616475 | 75 | $766803 |
| Share-based and deferred compensation activities | 4029 | 171128 |  |  |  |  | (1164) | (53767) |  | 117361 |  |  |
| Coherent acquisition | 22588 | 1207591 |  |  |  |  |  |  |  | 1207591 |  |  |
| Convertible debt conversions | 7181 | 337940 |  |  |  |  |  |  |  | 337940 |  |  |
| Net loss |  |  |  |  |  | (259458) |  |  |  | (259458) |  |  |
| Foreign currency translation adjustments |  |  |  |  | 87927 |  |  |  |  | 87927 |  |  |
| Change in fair value of interest rate instruments, net of taxes of $8,056 |  |  |  |  | 30071 |  |  |  |  | 30071 |  |  |
| Issuance of Series B shares |  |  |  |  |  |  |  |  |  |  | 140 | 1358000 |
| Pension adjustment, net of taxes of $(1682) |  |  |  |  | (6105) |  |  |  |  | (6105) |  |  |
| Dividends |  |  |  |  |  | (144251) |  |  |  | (144251) |  | 116612 |
| **Balance - June 30, 2023** | 154721 | $3781211 | 2300 | $445319 | $109726 | $944416 | (15137) | $(293121) | $— | $4987551 | 215 | $2241415 |
| Share-based and deferred compensation activities | 3447 | 166800 |  |  |  |  | (492) | (22001) |  | 144799 |  |  |
| Conversion of Series A preferred stock | 10240 | 445319 | (2300) | (445319) |  |  |  |  |  |  |  |  |
| Net loss |  |  |  |  |  | (156154) |  |  | (2610) | (158764) |  |  |
| Foreign currency translation adjustments |  |  |  |  | (82318) |  |  |  | 429 | (81889) |  |  |
| Change in fair value of interest rate instruments, net of taxes of $(5468) |  |  |  |  | (20196) |  |  |  |  | (20196) |  |  |
| Pension adjustment, net of taxes of $(1718) |  |  |  |  | (7443) |  |  |  |  | (7443) |  |  |
| Dividends |  |  |  |  |  | (123322) |  |  |  | (123322) |  | 123357 |
| Sale of shares of noncontrolling interests, net of issuance costs of $31,840 and taxes of $127,389  |  | 464327 |  |  | 2871 |  |  |  | 373573 | 840771 |  |  |
| **Balance - June 30, 2024** | 168408 | $4857657 |  | $— | $2640 | $664940 | (15629) | $(315122) | $371392 | $5581507 | 215 | $2364772 |
| Share-based and deferred compensation activities | 3441 | 199204 |  |  |  |  | (665) | (52943) |  | 146261 |  |  |
| Net earnings |  |  |  |  |  | 49364 |  |  | (19307) | 30057 |  |  |
| Foreign currency translation adjustments |  |  |  |  | 407646 |  |  |  | 1423 | 409069 |  |  |
| Change in fair value of interest rate instruments, net of taxes of $(5406) |  |  |  |  | (31898) |  |  |  |  | (31898) |  |  |
| Pension adjustment, net of taxes of $(1543) |  |  |  |  | (6351) |  |  |  |  | (6351) |  |  |
| Dividends |  |  |  |  |  | (129930) |  |  |  | (129930) |  | 118489 |
| Change in deferred tax basis for noncontrolling interests |  | (693) |  |  |  |  |  |  |  | (693) |  |  |
| **Balance - June 30, 2025** | 171849 | $5056168 |  | $— | $372037 | $584374 | (16294) | $(368065) | $353508 | $5998022 | 215 | $2483261 |

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*See Notes to Consolidated Financial Statements*

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**Coherent Corp. and Subsidiaries**

**Consolidated Statements of Cash Flows**

---

| | | | |
|:---|:---|:---|:---|
| **Year Ended June 30,** | **2025** | **2024** | **2023** |
| *($000)* |  |  |  |
| **Cash Flows from Operating Activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net earnings (loss) | $30057 | $(158764) | $(259458) |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 250810 | 271601 | 267562 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization | 302788 | 288160 | 414125 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation expense | 160239 | 126049 | 148872 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash restructuring and impairment charges | 140912 | 16557 | 119456 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of discount on convertible debt and debt issuance costs | 19774 | 17652 | 19850 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Losses on disposals of property, plant & equipment | 782 | 758 | 2440 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized losses (gains) on foreign currency remeasurements and transactions | 33122 | (10556) | (3549) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss (earnings) from equity investments | (1316) | 51 | 66 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | (95434) | (112096) | (206822) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on debt extinguishment |  | 1978 | 6855 |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase (decrease) in cash from changes in (net of effects of acquisitions): |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (170444) | 60581 | 68315 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (202728) | (23196) | 174136 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 217357 | 205044 | (83330) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | 3182 | (72818) | (18957) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes | (22118) | 12251 | 28651 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation and benefits | 62960 | 36894 | (60595) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other operating net assets (liabilities) | (96343) | (114415) | 16408 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by operating activities** | 633600 | 545731 | 634025 |
| **Cash Flows from Investing Activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additions to property, plant & equipment | (440836) | (346816) | (436060) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of businesses, net of cash acquired |  |  | (5488556) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the sale of business | 27000 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other investing activities | (379) | (3897) | (4010) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in investing activities** | (414215) | (350713) | (5928626) |
| **Cash Flows from Financing Activities** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sale of shares to noncontrolling interests |  | 1000000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from borrowings of Term B Facility |  |  | 2800000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of Series B preferred shares |  |  | 1400000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from borrowings of Term A Facility |  |  | 850000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from borrowings of revolving credit facilities | 53729 | 18966 | 65000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments on existing debt | (436986) | (228802) | (1265175) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments on borrowings under Revolving Credit Facilities | (51661) | (19027) | (65000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments on convertible notes |  |  | (3561) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt issuance costs |  |  | (126516) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity issuance costs |  | (31840) | (42000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from exercises of stock options and purchases of stock under employee stock purchase plan | 49570 | 42297 | 24167 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments in satisfaction of employees' minimum tax obligations | (53992) | (22315) | (54172) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash dividends paid | (11438) |  | (27600) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other financing activities | (948) | (1007) | (1124) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by (used in) financing activities** | (451726) | 758272 | 3554019 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 75568 | (1170) | (4223) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net increase (decrease) in cash and cash equivalents, and restricted cash | (156773) | 952120 | (1744805) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash, Cash Equivalents, and Restricted Cash at Beginning of Period | 1789686 | 837566 | 2582371 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Cash, Cash Equivalents, and Restricted Cash at End of Period** | $1632913 | $1789686 | $837566 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Supplemental Information** |  |  |  |

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------

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $256704 | $312879 | $282835 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for income taxes | $166849 | $97295 | $89567 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Non-Cash Investing and Financing Activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additions to property, plant & equipment included in accounts payable | $67146 | $63286 | $36777 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Conversion of Series A preferred stock to common stock | $— | $445319 | $— |

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*See Notes to Consolidated Financial Statements*

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same amounts shown in the Consolidated Statements of Cash Flows.

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| | | | |
|:---|:---|:---|:---|
| **Year Ended June 30,** | **2025** | **2024** | **2023** |
| *($000)* |  |  |  |
| Cash and cash equivalents | $909200 | $926033 | $821310 |
| Restricted cash, current | 8897 | 174008 | 12023 |
| Restricted cash, non-current | 714816 | 689645 | 4233 |
| Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows | $1632913 | $1789686 | $837566 |

---

*See Notes to Consolidated Financial Statements*

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**Coherent Corp. and Subsidiaries**

**Notes to Consolidated Financial Statements**

**Note 1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nature of Business and Summary of Significant Accounting Policies**

**Nature of Business.** Coherent Corp. ("Coherent," the "Company," "we," "us" or "our") is a vertically integrated manufacturing company that develops, manufactures and markets lasers, transceivers, and other optical and optoelectronic devices, modules, and systems, as well as engineered materials, for use in communications, industrial, instrumentation and electronics applications. We generate nearly all of our revenues, earnings, and cash flows from developing, manufacturing, and marketing a wide range of products and services for our end markets. Coherent has broad technical expertise and a deep technology stack in areas of importance to our products, including materials growth and fabrication of specialty materials, semiconductor lasers, passive optics including isolators, transceivers, transport equipment, high power lasers for semiconductor capital equipment, display manufacturing, precision manufacturing, and scientific research. Many of our products include custom integrated software that we develop internally, leveraging our deep domain expertise. The Company markets its products through its direct sales force and through distributors and agents.

The Company uses certain uncommon materials and compounds to manufacture its products. Some of these materials are available from only one proven outside source. The continued high quality of these materials is critical to the stability of our manufacturing yields.

**Consolidation.** The Consolidated Financial Statements include the accounts of the Company and all of its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified for consistency with the current year presentation.

**Use of Estimates.** The preparation of financial statements in conformity with generally accepted accounting principles in the United States ("U.S. GAAP") requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management's best knowledge of current events and actions Coherent may undertake in the future, actual results may ultimately differ from the estimates.

**Foreign Currency Translation.** For all foreign subsidiaries whose functional currency is not the U.S. dollar, the functional currency is the local currency. Assets and liabilities of those operations are translated into U.S. dollars using period-end exchange rates while income and expenses are translated using the average exchange rates for the reporting period. Translation adjustments are recorded as Accumulated other comprehensive income (loss) within Shareholders' equity in the accompanying Consolidated Balance Sheets.

**Cash, Cash Equivalents, and Restricted Cash.** We consider highly liquid investment instruments with an original maturity of three months or less to be cash equivalents. As of June 30, 2025, we had restricted cash of $724 million that is restricted for a specific purpose, with $9 million and $715 million recorded in Restricted cash, current and Restricted cash, non-current, respectively, on our Consolidated Balance Sheet.

**Allowance for Expected Credit Losses.** We recognize expected credit losses resulting from the inability of our customers to make required payments through an allowance account that is measured each reporting date. We estimate credit losses over the life of our trade accounts receivable using a combination of historical loss data, current credit conditions, specific customer circumstances, and reasonable and supportable forecasts of future economic conditions.

**Inventories.** Inventories are valued at the lower of cost or net realizable value, with cost determined on the first-in, first-out basis. Inventory costs include material, labor and manufacturing overhead. In evaluating the net realizable value of inventory, management also considers other factors, including known trends and market conditions. We generally record a reduction to the carrying value of inventory as a charge against earnings for all products on hand more than 12 to 24 months, depending on the nature of the products, that have not been sold to customers or cannot be further manufactured for sale to alternative customers. An additional charge may be recorded for product on hand that is in excess of product sold to customers over the same periods noted above.

**Property, Plant and Equipment.** Property, plant and equipment are carried at cost or fair value upon acquisition. Major improvements are capitalized, while maintenance and repairs are generally expensed as incurred. We review our property, plant and equipment and other long-lived assets for impairment whenever events or circumstances indicate that the carrying amounts may not be recoverable. Depreciation on property, plant and equipment and amortization on finance lease right-of-use assets for financial reporting purposes is computed primarily by the straight-line method over the estimated useful lives for building, building improvements and land improvements of 10 to 30 years and 3 to 20 years for machinery and equipment.

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**Investment Credit.** The Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (the "CHIPS Act") was signed into law on August 9, 2022. The CHIPS Act provides for various incentives and tax credits, among other items, including the Advanced Manufacturing Investment Credit ("AMIC"), which equals 25% of qualified investments in an advanced manufacturing facility that is placed in service after December 31, 2022. The Company expects to receive refundable federal investment tax credits through the CHIPS Act in connection with ongoing expansion projects. At least a portion of our capital expenditures qualify for this credit, which benefits us by allowing us to net the credit received against our costs. The AMIC credit is accounted as a reduction to the depreciable basis of the assets used in operations. The Company has offset the cost of property, plant, and equipment by the amount of the estimated credit of $41 million for fiscal June 30, 2025. The receivable recorded is an estimate based on the Company's interpretation of the Section 48D Advanced Manufacturing Investment Credit under the CHIPS Act, which may be refunded to us in cash to the extent it exceeds our outstanding income tax liabilities.

**Leases.** Leases are recognized under Accounting Standards Codification 842, Leases. The Company determines whether a contract contains a lease at contract inception. A contract contains a lease if there is an identified asset and the Company has the right to control the asset. Operating lease right-of-use ("ROU") assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. We use the incremental borrowing rate in determining the present value of lease payments, unless the implicit rate is readily determinable. If lease terms include options to extend or terminate the lease, the ROU asset and lease liability are measured based on the reasonably certain decision. We have lease agreements with lease and non-lease components, which are accounted for as a single lease component for all classes of leased assets for which the Company is the lessee. Additionally, for certain equipment leases, the portfolio approach is applied to account for the operating lease ROU assets and lease liabilities. In the Consolidated Statements of Earnings (Loss), lease expense for operating lease payments is recognized on a straight-line basis over the lease term. For finance leases, interest expense is recognized on the lease liability and the ROU asset is amortized over the lease term. Some leasing arrangements require variable payments that are dependent upon usage or output, or may vary for other reasons, such as insurance or tax payments. Variable lease payments are recognized as incurred, and are not presented as part of the ROU asset or lease liability. See Note 12. Leases for further information.

**Business Combinations.** The Company accounts for business combinations by establishing the acquisition-date fair value as the measurement for all assets acquired and liabilities assumed. Certain provisions of U.S. GAAP prescribe, among other things, the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration) and the exclusion of transaction and acquisition-related restructuring costs from acquisition accounting.

**Goodwill.** The excess purchase price over the fair value allocated to identifiable tangible and intangible net assets of businesses acquired is reported as goodwill in the accompanying Consolidated Balance Sheets. We test goodwill for impairment at least annually as of April 1, or when events or changes in circumstances indicate that goodwill might be impaired. The evaluation of impairment involves comparing the current fair value of our reporting units to the recorded value (including goodwill). We use a discounted cash flow ("DCF") model and/or a market analysis to determine the fair value of our reporting units. A number of assumptions and estimates are involved in estimating the forecasted cash flows used in the DCF model, including markets and market shares, sales volume and pricing, costs to produce, working capital changes and income tax rates. Management considers historical experience and all available information at the time the fair values of the reporting units are estimated. Goodwill impairment is measured as the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

As of April 1 of fiscal years 2025 and 2024, we completed our annual impairment tests of our reporting units using the quantitative assessment. For fiscal year 2025, the fair values of the reporting units were determined using a discounted cash flow analysis with projected financial information based on our most recently completed long-term strategic planning processes and also considered the current financial performance compared to our prior projections of the reporting units, as well as a market analysis. As of April 1, 2025 and 2024, the fair value of each of our reporting units exceeded their carrying values.

Due to the cyclical nature of our business, and the other factors described in the section on Risk Factors set forth in Item 1A of our Annual Report on Form 10-K filed on August 15, 2025, the profitability of our individual reporting units may periodically be affected by downturns in customer demand, operational challenges and other factors. If material adverse conditions occur that impact one or more of our reporting units, our determination of future fair value might not support the carrying amount of one or more of our reporting units, and the related goodwill would need to be impaired.

**Intangibles.** Intangible assets are initially recorded at their cost or fair value upon acquisition. Finite-lived intangible assets are amortized using the straight-line method over the estimated useful lives of the assets ranging from 1 to 20 years. Indefinite-lived intangible assets are not amortized but tested annually for impairment at April 1, or when events or changes in circumstances indicate that indefinite-lived intangible assets might be impaired. As of April 1 of fiscal 2025, the Company completed a quantitative impairment test of the Coherent trade name acquired in the Merger using the relief from royalty method and determined that its fair value is well in excess of its carrying value.

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**Series A Mandatory Convertible Preferred Stock**. The Mandatory Convertible Preferred Stock was initially measured at fair value, less underwriting discounts and commissions and offering expenses paid by the Company. The Preferred Stock's dividends were cumulative, at 6% per annum. All outstanding shares of Mandatory Convertible Preferred Stock were converted to 10,240,290 shares of Company Common Stock on July 3, 2023, at a conversion ratio of 4.4523, and no shares of Mandatory Convertible Preferred Stock are currently issued and outstanding. See Note 9. Equity and Redeemable Preferred Stock for further information.

**Series B Convertible Preferred Stock.** The Series B-1 Convertible Preferred Stock was initially measured at fair value less issuance costs, accreted to its redemption value over a ten-year period (using the effective interest method) with such accretion accounted for as deemed dividends and reductions to Net Earnings (Loss) Available to the Common Shareholders. The Series B-2 Convertible Preferred Stock was initially measured at fair value less issuance costs, accreted to its redemption value over a ten-year period (using the effective interest method) with such accretion accounted for as deemed dividends and reductions to Net Earnings (Loss) Available to the Common Shareholders. See Note 9. Equity and Redeemable Preferred Stock for further information.

**Noncontrolling Interests.** The Company accounts for noncontrolling interests in accordance with ASC Topic 810-10-45, which requires the Company to present noncontrolling interests as a separate component of total shareholders' equity on the Consolidated Balance Sheets and the consolidated net earnings (loss) attributable to its noncontrolling interests be clearly identified and presented on the face of the Consolidated Statements of Earnings (Loss) and Consolidated Statements of Comprehensive Income (Loss). See Note 11. Noncontrolling Interests for further information on the noncontrolling interests in our Silicon Carbide LLC subsidiary.

**Commitments and Contingencies.** Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. If a loss is not both probable and reasonably estimable, or if an exposure to a loss exists in excess of the amount accrued, the Company assesses whether there is at least a reasonable possibility that a loss, or additional loss, may have been incurred. If there is a reasonable possibility that a loss, or additional loss, may have been incurred, the Company discloses the estimate of the possible loss or range of loss if it is material and an estimate can be made, or discloses that such an estimate cannot be made. The determination as to whether a loss can reasonably be considered to be possible or probable is based on management's assessment, together with legal counsel, regarding the ultimate outcome of the matter. Legal costs incurred in connection with loss contingencies are expensed as incurred. Such liabilities are adjusted as further information develops or circumstances change. Our customers may discover defects in our products after the products have been fully deployed and operated under peak stress conditions. If we are unable to correct defects or other problems, we could experience, among other things, loss of customers, increased costs of product returns and warranty expenses, damage to our brand reputation, failure to attract new customers or achieve market acceptance, diversion of development and engineering resources, or legal action by our customers. We had no material loss contingency liabilities at June 30, 2025 or 2024 related to commitments and contingencies.

**Supply chain financing arrangements.** The Company has entered into supply chain financing arrangements with third-party financial institutions to provide its vendors with enhanced payment options while providing the Company with added working capital flexibility. The Company does not provide any guarantees under these arrangements, does not have an economic interest in its supplier's voluntary participation, does not receive an economic benefit from the financial institutions, and no assets are pledged under the arrangements. The arrangements do not change the payable terms negotiated by the Company and our vendors and does not result in a change in the classification of amounts due as accounts payable in the Consolidated Balance Sheets. Suppliers utilized the program to accelerate receipt of payment from these financial institutions for $18 million and $10 million of the Company's outstanding Accounts payable as of June 30, 2025 and 2024, respectively. Total supplier invoices paid by the financial institutions amounted to $76 million and $38 million for the years ended June 30, 2025 and 2024, respectively. The supplier invoices included under the program require payment in full to the financial institutions consistent with the Company's normal terms and conditions as agreed upon with the vendor.

**Income Taxes.** Deferred income tax assets and liabilities are determined based on the differences between the Consolidated Financial Statements and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount more likely than not to be realized. The Company's accounting policy is to apply acquired deferred tax liabilities to pre-existing deferred tax assets before evaluating the need for a valuation allowance for acquired deferred tax assets.

------

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The amount of unrecognized tax benefits is adjusted for changes in facts and circumstances. For example, adjustments could result from significant amendments to existing tax law and the issuance of regulations or interpretations by the taxing authorities, new information obtained during a tax examination, or resolution of an examination. The Company believes that its estimates for uncertain tax positions are appropriate and sufficient to pay assessments that may result from examinations of its tax returns. The Company recognizes both accrued interest and penalties related to unrecognized tax benefits in income tax expense.

The Company uses a portfolio approach to release the income tax effects in AOCI related to interest rate instruments and pension and postretirement benefits. Under this approach, the income tax effects are released from AOCI based on the pre-tax adjustments to interest rate instruments and pension liabilities or assets recognized within other comprehensive income (loss). Any tax effects remaining in AOCI are released only when the entire portfolio of the interest rate instruments or pension and postretirement benefits is liquidated, sold or extinguished.

**Revenue Recognition.** Revenue is recognized under Accounting Standards Codification 606, Revenue from Contracts with Customers (ASC 606), when or as obligations under the terms of a contract with our customer have been satisfied and control has transferred to the customer.

We have elected the practical expedient to exclude all sales and use taxes from the measurement of the transaction price. In certain customer arrangements, we are contractually entitled to reimbursement for import tariffs incurred on product shipments, the increase in consideration received due to tariff surcharges would not meet the sales and use tax practical expedient. As such, revenue including the tariff surcharge, and related tariff expense, would be recorded gross in the income statement. These reimbursements are considered part of the transaction price under ASC 606 and are recognized as revenue on a gross basis. The corresponding tariff costs are recorded in cost of goods sold.

For contracts with commercial customers, which comprise the majority of our performance obligations, ownership of the goods and associated revenue are generally transferred to customers at a point in time, generally upon shipment of a product to the customer or delivery of the product to the customer and without significant judgments. The majority of contracts typically require payment within 30 to 90 days after transfer of ownership to the customer.

We periodically enter into contracts in which a customer may purchase a combination of goods and/or services, such as products with maintenance contracts or extended warranty. Maintenance contracts and extended warranties are typically sold separately from products, and represent a distinct performance obligation. Revenue related to the performance obligation for maintenance contracts and extended warranties is recognized over time as the customer simultaneously receives and consumes the benefits provided by us.

Service revenue includes repairs, tolling arrangements and installation. Repairs, tolling and installation activities are usually completed in a short period of time (normally less than one month) and therefore recorded at a point in time when the services are completed. The majority of contracts typically require payment within 30 to 90 days after performance of the service.

Non-recurring engineering arrangements are typically recognized as product revenue over time under either the time and material practical expedient, as the entity has a right to consideration from a customer, in an amount that corresponds directly with the value to the customer of the entity's performance completed to date, or under the output and input method. The majority of contracts typically require payment within 30 to 90 days.

Our revenue recognition policy is consistently applied across our segments, product lines, services, and geographical locations. For the periods covered herein, we measure revenue based on the amount of consideration the Company expects to be entitled to in exchange for products or services, reduced by the amount of variable consideration related to products expected to be returned. We determine variable consideration, which primarily consists of product returns and distributor sales price reductions resulting from price protection agreements, by estimating the impact of such reductions based on historical analysis of such activity.

Under ASC 606, we expense sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses ("SG&A"). Costs for freight and shipping are generally recorded in cost of goods sold when control of the products has transferred to the customer.

We offer an assurance-type limited warranty that products will be free from defects in materials and workmanship. We establish an accrual for estimated warranty expenses at the time revenue is recognized. The warranty is typically one year, although it can be longer periods for certain products, and is typically limited to either (1) the replacement or repair of the product or (2) a credit against future purchases.

------

We believe that disaggregating revenue by end market provides the most relevant information regarding the nature, amount, timing, and uncertainty of revenues and cash flows. See Note 3. Revenue from Contracts with Customers for further information.

**Research and Development.** R&D expenses include salaries, contractor and consultant fees, supplies and materials, as well as costs related to other overhead such as depreciation, facilities, utilities and other departmental expenses. The costs we incur with respect to internally developed technology, including allocations of our wafer fabrication and other manufacturing facilities and resources utilized to support R&D programs, are included in R&D expenses as incurred.

**Restructuring.** The Company records charges associated with approved restructuring plans to reorganize operations, to remove redundant headcount and infrastructure associated with site consolidations, facilities moves and closures, as well as the relocation and requalification of certain manufacturing facilities. Restructuring charges can include severance costs to eliminate a specific number of positions, infrastructure charges to vacate facilities and consolidate operations and contract cancellation costs. The Company records restructuring charges when they are probable and estimable. The Company evaluates restructuring charges in accordance with ASC 420, Exit or Disposal Cost Obligations, and ASC 712, Compensation-Nonretirement Post-Employment Benefits (ASC 712). See Note 20. Restructuring Plans for further information.

**Assets Held-for-Sale.** Assets and liabilities are classified as held-for-sale when management approves and commits to a formal plan to actively market the assets for sale at a price reasonable in relation to their estimated fair value, the assets are available for immediate sale in their present condition, an active program to locate a buyer and other actions required to complete the sale have been initiated, the sale of the assets is probable and expected to be completed within one year, and it is unlikely that significant changes will be made to the plan. These conditions are usually met from the date on which a letter of intent or agreement to sell is ready for signing. Assets held-for-sale are reported at the lower of carrying amount or fair value less costs to sell. Long-lived assets classified as held-for-sale are not subject to depreciation or amortization. The held-for-sale designation and carrying value of assets held-for-sale are periodically reviewed and adjusted as facts and circumstances indicate that a change may be necessary. See Note 21. Assets Held-for-Sale for further information.

**Share-Based Compensation.** Share-based compensation arrangements require the recognition in net earnings (loss) of the grant date fair value of share-based compensation (for equity-classified awards). We recognize the share-based compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period, net of forfeitures. The estimated annualized forfeitures are based on our historical experience of pre-vesting cancellations. We will record additional expense in future periods if the actual forfeiture rate is lower than estimated, and will adjust expense in future periods if the actual forfeitures are higher than estimated. See Note 13. Share-Based Compensation for a description of our share-based compensation plans and the assumptions we use to calculate the fair value of share-based compensation.

**Earnings per Share.** Basic earnings (loss) per share is computed by dividing net earnings (loss) available to the common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed by dividing the diluted earnings (loss) available to the common shareholders by the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period. If there is a net loss for the period, diluted earnings per share is the same as basic earnings per share. See Note 10. Earnings Per Share for further information.

**Accumulated Other Comprehensive Income (Loss) ("AOCI").** AOCI is a measure of all changes in shareholders' equity that result from transactions and other economic events in the period other than transactions with owners. AOCI is a component of shareholders' equity and consists of accumulated foreign currency translation adjustments, changes in the fair value of interest rate derivative instruments, and pension adjustments.

**Fair Value Measurements.** We apply fair value accounting for all financial assets and liabilities that are required to be recognized or disclosed at fair value in the Consolidated Financial Statements. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, we consider the principal or most advantageous market in which we would transact, and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

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**Note 2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recently Issued and Adopted Financial Accounting Standards**

***Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures***

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07 - Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted the standard during fiscal 2025. See Note 14. Segment and Geographic Reporting for further information.

***Income Taxes (Topic 740): Improvements to Income Tax Disclosures***

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, on either a prospective or retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.

***Income Statement Reporting: Disaggregation of Income Statement Expenses***

In November 2024, the FASB issued ASU 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses." This ASU requires disclosure about specific types of expenses included in expense captions including purchases of inventory, employee compensation, depreciation, amortization, and depletion. This ASU is effective for our annual disclosures starting in fiscal year 2028 and interim periods starting in fiscal year 2029. Early adoption is permitted. A public entity should apply the amendments in this ASU on a prospective basis with the option to apply the standard retrospectively. The Company is currently evaluating this ASU to determine its impact on the Company's disclosures.

**Note 3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Revenue from Contracts with Customers**

We disaggregate revenue by market and geography. We believe that disaggregating revenue by market and geography provides the most relevant information regarding the nature, amount, timing, and uncertainty of revenues and cash flows. We do not present other levels of disaggregation, such as by type of products, customer, contracts, duration of contracts, timing of transfer of control and sales channels, as this information is not used by our CODM to manage the business.

Effective July 1, 2025, the Company aligned its reporting of revenues into two markets: (i) Datacenter & Communications, and (ii) Industrial. All prior period market and segment disclosure information has been reclassified to conform to the current reporting structure.

The following table summarizes disaggregated revenue by market ($000):

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended June 30,** | **Year Ended June 30,** | **Year Ended June 30,** |
| Markets | **2025** | **2024** | **2023** |
| Datacenter & Communications | $3755164 | $2631369 | $2966426 |
| Industrial | 2054951 | 2076319 | 2193674 |
| Total Revenues | $5810115 | $4707688 | $5160100 |

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***Contract Liabilities***

Payments received from customers are based on invoices or billing schedules as established in contracts with customers. Contract liabilities generally relate to payments received in advance of performance under a contract. Contract liabilities are recognized as revenue when performance obligations have been satisfied. During the year ended June 30, 2025, we recognized revenue of $55 million related to customer payments that were included in the Consolidated Balance Sheet as of June 30, 2024. As of June 30, 2025 and June 30, 2024, we had $72 million and $76 million, respectively, of contract liabilities recorded in the Consolidated Balance Sheets. As of June 30, 2025, $63 million of contract liabilities is included in other accrued liabilities, and $9 million is included within other liabilities on the Consolidated Balance Sheet. As of June 30, 2024, $62 million of contract liabilities is included other accrued liabilities, and $13 million is included within other liabilities on the Consolidated Balance Sheet.

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**Note 4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories**

The components of inventories were as follows ($000):

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| | | |
|:---|:---|:---|
| **June 30,** | **2025** | **2024** |
| Raw materials | $394682 | $429888 |
| Work in progress | 824360 | 620575 |
| Finished goods | 218594 | 235941 |
| Total Inventories | $1437636 | $1286404 |

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**Note 5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property, Plant & Equipment**

Property, plant & equipment consists of the following ($000):

---

| | | |
|:---|:---|:---|
| **June 30,** | **2025** | **2024** |
| Land and land improvements | $59543 | $66156 |
| Buildings and improvements | 881578 | 774991 |
| Machinery and equipment | 2188509 | 2034310 |
| Construction in progress | 363129 | 398884 |
| Finance lease right-of-use asset |  | 25000 |
|  | 3492759 | 3299341 |
| Less accumulated depreciation | (1615252) | (1482082) |
| Property, plant, and equipment, net | $1877507 | $1817259 |

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**Note 6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill and Other Intangible Assets**

The changes in the carrying amount of goodwill were as follows ($000):

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended June 30, 2025** | **Year Ended June 30, 2025** | **Year Ended June 30, 2025** |
| | **Datacenter & Communications** | **Industrial** | **Total** |
| Balance at beginning of period | $1147297 | $3317032 | $4464329 |
| Other reclassifications (See Note 21) |  | (174373) | (174373) |
| Foreign currency translation and other | 3273 | 177855 | 181128 |
| Balance-end of period | $1150570 | $3320514 | $4471084 |

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended June 30, 2024** | **Year Ended June 30, 2024** | **Year Ended June 30, 2024** |
| | **Datacenter & Communications** | **Industrial** | **Total** |
| Balance at beginning of period | $1149209 | $3363491 | $4512700 |
| Foreign currency translation and other | (1912) | (46459) | (48371) |
| Balance-end of period | $1147297 | $3317032 | $4464329 |

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Prior to our change in segments, goodwill as of June 30, 2025, was $1,038 million, $241 million and $3,191 million in our Networking, Materials and Lasers segments, respectively.

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The gross carrying amount and accumulated amortization of our intangible assets other than goodwill as of June 30, 2025 and 2024 were as follows ($000):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2024** | **June 30, 2024** | **June 30, 2024** |
| | **Gross<br>Carrying<br>Amount** | **Accumulated<br>Amortization** | **Net<br>Book Value** | **Gross<br>Carrying<br>Amount** | **Accumulated<br>Amortization** | **Net<br>Book Value** |
| Technology | $1534066 | $(513181) | $1020885 | $1653289 | $(394040) | $1259249 |
| Trade Names | 438471 | (8471) | 430000 | 438470 | (8470) | 430000 |
| Customer Lists | 2440834 | (686972) | 1753862 | 2310550 | (498252) | 1812298 |
| Backlog and Other | 90121 | (90121) |  | 88792 | (87092) | 1700 |
| Total | $4503492 | $(1298745) | $3204747 | $4491101 | $(987854) | $3503247 |

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Amortization expense recorded on the intangible assets for the fiscal years ended June 30, 2025, 2024 and 2023 was $303 million, $288 million, and $414 million, respectively. The technology intangible assets are being amortized over a range of 60 to 240 months with a weighted-average remaining life of approximately 116 months, and the amortization is recorded in Cost of goods sold in our Consolidated Statements of Earnings (Loss). The customer lists are being amortized over 60 to 192 months with a weighted-average remaining life of approximately 138 months, and the amortization is recorded in SG&A in our Consolidated Statements of Earnings (Loss).

Amortization expense in the fiscal year ended June 30, 2025 includes a total of $17 million of impairment charges in the Industrial segment related to the abandonment of certain purchased technology and licenses, with $14 million recorded in cost of goods sold and $3 million recorded in R&D in our Consolidated Statements of Earnings (Loss). There were no impairment charges included in amortization expense in the fiscal year ended June 30, 2024.

Amortization expense in the fiscal year ended June 30, 2023 includes a total of $39 million of impairment charges, with $16 million in the Industrial segment and $23 million in the Datacenter & Communications segment. $25 million of the impairment charges related to the abandonment of certain purchased technology and customer lists, with $8 million recorded in Cost of goods sold and $18 million recorded in SG&A in our Consolidated Statement of Earnings (Loss). $14 million of impairment charges, recorded in SG&A, related to the abandonment of indefinite-lived trade names primarily due to the fiscal 2023 rebranding of the Company as Coherent Corp.

In the fourth quarter of fiscal year 2025, we completed our impairment test of our $430 million indefinite-lived Coherent trade name acquired in the Merger, concluding it was not impaired.

The estimated amortization expense for existing intangible assets for each of the five succeeding years is as follows ($000):

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| | |
|:---|:---|
| **Year Ending June 30,** | |
| 2026 | $282869 |
| 2027 | 281618 |
| 2028 | 279930 |
| 2029 | 273718 |
| 2030 | 251603 |

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**Note 7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt**

The components of debt as of the dates indicated were as follows ($000):

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| | | |
|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2024** |
| Term A Facility, interest at adjusted SOFR, as defined, plus 1.850% | $624375 | $775625 |
| Debt issuance costs, Term A Facility and Revolving Credit Facility | (8141) | (13586) |
| Term B Facility, interest at adjusted SOFR, as defined, plus 2.00% | 2102358 | 2384536 |
| Debt issuance costs, Term B Facility | (36478) | (49835) |
| 5.00% Senior Notes | 990000 | 990000 |
| Debt Issuance costs, Senior Notes | (4966) | (5939) |
| 1.3% Term loan  |  | 335 |
| Facility construction loan in Germany | 17682 | 19082 |
| Borrowings on local lines of credit | 2091 |  |
| Total debt | 3686921 | 4100218 |
| Current portion of long-term debt | (188306) | (73770) |
| Long-term debt, less current portion | $3498615 | $4026448 |

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The required annual principal repayments for all indebtedness for the next five years and thereafter, as of June 30, 2025, is set forth in the following table ($000):

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| | |
|:---|:---|
| | **Year Ending**<br>**June 30,** |
| 2026 | $188306 |
| 2027 | 16652 |
| 2028 | 614152 |
| 2029 | 3215 |
| 2030 | 2912573 |
| Thereafter | 1608 |
| Total | $3736506 |

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***Senior Credit Facilities***

On July 1, 2022 (the "Closing Date"), Coherent entered into a Credit Agreement (the "Credit Agreement") by and among the Company, as borrower (in such capacity, the "Borrower"), the lenders, and other parties thereto, and JP Morgan Chase Bank, N.A., as administrative agent and collateral agent, which provides for senior secured financing of $4.0 billion, consisting of a term loan A credit facility (the "Term A Facility") maturing July 1, 2027, with an aggregate principal amount of $850 million, a term loan B credit facility (the "Term B Facility" and, together with the Term A Facility, the "Term Facilities") maturing July 1, 2029, with an aggregate principal amount of $2,800 million, and a revolving credit facility (the "Revolving Credit Facility" and together with the Term Facilities, the "Senior Credit Facilities") maturing July 1, 2027, in an aggregate available amount of $350 million, including a letter of credit sub-facility of up to $50 million. On March 31, 2023, Coherent entered into Amendment No. 1 to the Credit Agreement, which replaced the adjusted LIBOR-based rate of interest therein with an adjusted SOFR-based rate of interest. As amended, the Term A Facility and the Revolving Credit Facility each bear interest at an adjusted SOFR rate subject to a 0.10% floor plus a range of 1.75% to 2.50%, based on the Company's total net leverage ratio. The Term A Facility and the Revolving Credit Facility bear interest at adjusted SOFR plus 1.85% as of June 30, 2025. On April 2, 2024, Coherent entered into Amendment No. 2 to the Credit Agreement, under which the principal amount of term B loans outstanding under the Credit Agreement (the "Existing Term B Loans") were replaced with an equal amount of new term loans (the "New Term B Loans") having substantially similar terms as the Existing Term B Loans, except with respect to the interest rate applicable to the New Term B Loans and certain other provisions. Debt extinguishment costs related to the replacement of the Existing Term B Loans of $2 million were expensed in Other expense (income), net in the Consolidated Statement of Earnings (Loss) during the year ended June 30, 2024. On January 2, 2025, Coherent entered into Amendment No. 3 to the Credit Agreement, under which the principal amount of New Term B Loans outstanding under the Credit Agreement were replaced with an equal amount of new term loans (the "New Term B-2 Loans") having substantially similar terms as the New Term B Loans, except with respect to the interest rate applicable to the New Term B-2 Loans and certain other provisions. As

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further amended, the New Term B-2 Loans bear interest at a SOFR rate (subject to a 0.50% floor) plus 2.00% as of June 30, 2025. The maturity of the New Term B-2 Loans and Revolving Credit Facility remains unchanged.

In relation to the Term Facilities, the Company incurred interest expense, including amortization of debt issuance costs and the benefit of the interest rate cap and swap, of $192 million and $237 million in the years ended June 30, 2025 and June 30, 2024, respectively, which is included in Interest expense in the Consolidated Statements of Earnings (Loss). On July 1, 2023, our interest rate cap became effective, which together with our interest rate swap (through September 30, 2024), reduced interest expense by $32 million and $45 million in the years ended June 30, 2025 and June 30, 2024, respectively. Amortization of debt issuance costs related to the Term Facilities for the year ended June 30, 2025 and June 30, 2024 totaled $17 million and $15 million, respectively, and are included in Interest expense in the Consolidated Statements of Earnings (Loss). Debt issuance costs are presented as a reduction to debt within the Long-term debt caption in the Consolidated Balance Sheets.

On the Closing Date, the Borrower and certain of its direct and indirect subsidiaries, provided a guaranty of all obligations of the Borrower and the other loan parties under the Credit Agreement and the other loan documents, secured cash management agreements and secured hedge agreements with the lenders and/or their affiliates (subject to certain exceptions). The Borrower and the other guarantors have also granted a security interest in substantially of their assets to secure such obligations.

As of June 30, 2025, the Company was in compliance with all covenants under the Term Facilities.

***Debt Assumed through Acquisition***

We assumed the remaining balances of three term loans with the closing of the Merger, two of which were repaid prior to June 30, 2024. The aggregate principal amount outstanding is $18 million as of June 30, 2025 and is for a Facility construction loan in Germany due in 2030 that bears interest at 1.55% per annum. Payments are made quarterly.

***5.000% Senior Notes due 2029***

On December 10, 2021, the Company issued $990 million aggregate principal amount of Senior Notes pursuant to the indenture, dated as of December 10, 2021 (the "Indenture"), between the Company and U.S. Bank National Association, as trustee. The Senior Notes are guaranteed by each of the Company's domestic subsidiaries that guarantee its obligations under the Senior Credit Facilities. Interest on the Senior Notes is payable on December 15 and June 15 of each year, commencing on June 15, 2022, at a rate of 5.000% per annum. The Senior Notes will mature on December 15, 2029*.* 

On or after December 15, 2024, the Company may redeem the Senior Notes, in whole at any time or in part from time to time, at the redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. In addition, at any time prior to December 15, 2024, the Company had the ability to (but did not) redeem the Senior Notes, at its option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Senior Notes redeemed, plus a "make-whole" premium set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. Notwithstanding the foregoing, at any time and from time to time prior to December 15, 2024, the Company had the ability to (but did not) redeem up to 40% of the aggregate principal amount of the Senior Notes using the proceeds of certain equity offerings as set forth in the Indenture, at a redemption price equal to 105.000% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.

In relation to the Senior Notes, we incurred interest expense of $50 million for both the years ended June 30, 2025 and June 30, 2024, which is included in Interest expense in the Consolidated Statements of Earnings (Loss).

The Indenture contains customary covenants and events of default, including default relating to among other things, payment default, failure to comply with covenants or agreements contained in the Indenture or the Senior Notes and certain provisions related to bankruptcy events. As of June 30, 2025, the Company was in compliance with all covenants under the Indenture.

***Aggregate Availability***

The Company had aggregate availability of $315 million under its Revolving Credit Facility as of June 30, 2025.

***Weighted Average Interest Rate***

The weighted average interest rate of total borrowings was 6% and 7% for the years ended June 30, 2025 and 2024, respectively.

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**Note 8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income Taxes**

The components of earnings (loss) before income taxes by jurisdiction were as follows ($000):

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| | | | |
|:---|:---|:---|:---|
| **Year Ended June 30,** | **2025** | **2024** | **2023** |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. loss | $(445586) | $(540048) | $(450370) |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-U.S. income | 539767 | 392401 | 94812 |
| Earnings (loss) before income taxes | $94181 | $(147647) | $(355558) |

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The components of the income tax expense (benefit) were as follows ($000):

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| | | | |
|:---|:---|:---|:---|
| **Year Ended June 30,** | **2025** | **2024** | **2023** |
| Current: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal | $3010 | $10119 | $5 |
| &nbsp;&nbsp;&nbsp;&nbsp;State | 1733 | 181 | 3867 |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign | 154815 | 103640 | 106850 |
| Total Current | 159558 | 113940 | 110722 |
| Deferred: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal | (50454) | (68955) | (106044) |
| &nbsp;&nbsp;&nbsp;&nbsp;State | (7217) | (186) | (7151) |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign | (37763) | (33682) | (93627) |
| Total Deferred | (95434) | (102823) | (206822) |
| Total Income Tax Expense (Benefit) | $64124 | $11117 | $(96100) |

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Principal items comprising deferred tax assets and liabilities were as follows ($000):

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| | | |
|:---|:---|:---|
| **June 30,** | **2025** | **2024** |
| **Deferred income tax assets** |  |  |
| Inventory capitalization | $74886 | $62242 |
| Non-deductible accruals | 18222 | 16770 |
| Accrued employee benefits | 36331 | 38460 |
| Net-operating loss and credit carryforwards | 256794 | 268735 |
| Share-based compensation expense | 15852 | 15947 |
| Other | 9564 | 1346 |
| Research and development capitalization | 168998 | 128291 |
| Deferred revenue | 15376 | 14839 |
| Right of use asset | 37785 | 47712 |
| Valuation allowances | (163678) | (154830) |
| Total deferred income tax assets | 470130 | 439512 |
| **Deferred income tax liabilities** |  |  |
| Tax over book accumulated depreciation | (14038) | (29065) |
| Intangible assets | (863484) | (905435) |
| Interest rate swap |  | (4104) |
| Interest rate cap | (4000) | (11465) |
| Tax on unremitted earnings | (63383) | (61719) |
| Outside basis differences | (142781) | (122423) |
| Lease liability | (31239) | (46198) |
| Other | (9515) | (2511) |
| Total deferred income tax liabilities | (1128440) | (1182920) |
| Net deferred income taxes | $(658310) | $(743408) |

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The reconciliation of income tax expense at the statutory U.S. federal rate to the reported income tax expense (benefit) is as follows ($000):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Year Ended June 30,** | **2025** | **%** | **2024** | **%** | **2023** | **%** |
| Taxes at statutory rate | $19778 | 21 | $(31006) | 21 | $(74667) | 21 |
| Increase (decrease) in taxes resulting from: |  |  |  |  |  |  |
| State income taxes-net of federal benefit | (4265) | (5) | (22) |  | (2548) | 1 |
| Taxes on non U.S. earnings | 3632 | 4 | 16601 | (11) | 191 |  |
| Valuation allowance | 20295 | 22 | 43866 | (30) | 3836 | (1) |
| U.S. Branch Income | (1216) | (1) | 3226 | (2) | 2037 | (1) |
| Noncontrolling interest | 4284 | 4 | 1002 | (1) |  |  |
| Research and manufacturing incentive deductions and credits | (26396) | (28) | (41387) | 28 | (29416) | 8 |
| Stock compensation | 2153 | 2 | 13294 | (9) | 18661 | (5) |
| GILTI and FDII | 13631 | 15 | (629) |  | (7195) | 2 |
| Uncertain Tax Positions | 6814 | 7 | 3301 | (2) | (3450) | 1 |
| Notional Interest | (10174) | (11) | (2521) | 2 | (7896) | 2 |
| Assets held-for-sale | 36895 | 39 |  |  |  |  |
| Other | (1307) | (1) | 5392 | (4) | 4347 | (1) |
|  | $64124 | 68 | $11117 | (8) | $(96100) | 27 |

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On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act of 2025 which includes, among other provisions, changes to the U.S. corporate income tax system including the allowance of immediate expensing of qualifying research and development expenses and permanent extensions of certain provisions within the Tax Cuts and Jobs Act. Certain provisions are effective for the Company beginning fiscal 2026. The Company is evaluating the future impact of these tax law changes on its financial statements.

The Company is partially permanently reinvested and will repatriate earnings for all non-U.S. subsidiaries with cash in excess of working capital needs. Such distributions could potentially be subject to U.S. state tax in certain states and foreign withholding taxes. Foreign currency gains (losses) related to the translation of previously taxed earnings from functional currency to U.S. dollars could also be subject to U.S. tax when distributed. The Company has estimated the associated withholding tax to be $63 million.

Additionally, the Company made a final accounting policy election to treat taxes due from future inclusions in U.S. taxable income related to global intangible low tax income ("GILTI") as a current period expense when incurred.

During the fiscal years ended June 30, 2025, 2024, and 2023, cash paid by the Company for income taxes was $167 million, $97 million, and $90 million, respectively.

Our foreign subsidiaries in various tax jurisdictions operate under tax holiday arrangements. The impact of the tax holidays on our effective rate is a reduction in the rate of 11.6%, 5.6% and 2.3% for the fiscal years ended June 30, 2025, 2024 and 2023, respectively, and the impact of the tax holidays on diluted earnings per share is $0.06, $0.05, and $0.05 for the fiscal years ended June 30, 2025, 2024, and 2023, respectively. The tax holiday related to Coherent Malaysia Sdn. Bhd will end during the fiscal year ended June 30, 2026 for certain business lines, the tax holiday related to certain II-VI Laser Enterprise Philippines, Inc.'s business lines will end during the fiscal year ended June 30, 2026, the tax holiday related to Silicon Carbide Vietnam Limited Liability Company will end during the fiscal year ended June 30, 2026, the tax holiday related to certain Coherent Vietnam (Dong Nai) Company Limited business lines will end during the fiscal year ended June 30, 2026, and the tax holiday related to certain Coherent Singapore PTE Ltd business lines will end during the fiscal year ended June 30, 2027.

The Company has the following gross operating loss carryforwards and tax credit carryforwards as of June 30, 2025 ($000):

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| | | |
|:---|:---|:---|
| **Type** | **Amount** | **Expiration Date** |
| Tax credit carryforwards: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal research and development credits | $121286 | June 2032-June 2045 |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign tax credits | 12964 | June 2030-June 2035 |
| &nbsp;&nbsp;&nbsp;&nbsp;State tax credits | 15976 | June 2026-June 2040 |
| &nbsp;&nbsp;&nbsp;&nbsp;State tax credits (indefinite) | 79179 | Indefinite |
| Operating loss carryforwards: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss carryforwards - federal | $31278 | June 2026-June 2036 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss carryforwards - federal (indefinite) | 1754 | Indefinite |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss carryforwards - state | 330313 | June 2026-June 2045 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss carryforwards - state (indefinite) | 42674 | Indefinite |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss carryforwards - foreign | 85218 | June 2026-June 2033 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss carryforwards - foreign (indefinite) | 48711 | Indefinite |

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The Company has recorded a valuation allowance against the majority of the foreign and state loss and credit carryforwards, certain U.S. credit carryforwards and the majority of state credit carryforwards. The Company's U.S. federal loss carryforwards, federal research and development credit carryforwards, foreign tax credits, and certain state tax credits resulting from the Company's acquisitions are subject to various annual limitations under Section 382 of the U.S. Internal Revenue Code.

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Changes in the liability for unrecognized tax benefits for the fiscal years ended June 30, 2025, 2024 and 2023 were as follows ($000):

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| | | | |
|:---|:---|:---|:---|
| **Year Ended June 30,** | **2025** | **2024** | **2023** |
| Beginning balance | $116697 | $115180 | $37411 |
| Increases in current year tax positions | 9660 | 5168 | 110 |
| Acquired business |  |  | 86077 |
| Settlements |  | (2970) |  |
| Expiration of statute of limitations | (2349) | (681) | (8418) |
| Ending balance | $124008 | $116697 | $115180 |

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The Company classifies all estimated and actual interest and penalties as income tax expense. During fiscal years 2025, 2024 and 2023, there was $2.0 million, $2.3 million and $0.3 million of interest and penalties within income tax expense, respectively. The Company had $9 million, $7 million and $6 million of interest and penalties accrued at June 30, 2025, 2024 and 2023, respectively. The Company has classified the uncertain tax positions as non-current income tax liabilities, as the amounts are not expected to be paid within one year. The majority of the liability can be offset by credit carryforwards and would not impact cash taxes. Including tax positions for which the Company determined that the tax position would not meet the more likely than not recognition threshold upon examination by the tax authorities based upon the technical merits of the position, the total estimated unrecognized tax benefit that, if recognized, would affect our effective tax rate, was approximately $20 million, $19 million and $92 million at June 30, 2025, 2024 and 2023, respectively. For the years ended June 30, 2025 and June 30, 2024, due to the U.S. valuation allowance, a large portion of our unrecognized tax benefit will no longer impact the tax rate if recognized. The Company expects a decrease of $67 million of unrecognized tax benefits during the next 12 months due to the expiration of statutes of limitation.

Fiscal years 2018 and 2022 to 2025 remain open to examination by the Internal Revenue Service, fiscal years 2021 to 2025 remain open to examination by certain state jurisdictions, and fiscal years 2012 to 2025 remain open to examination by certain foreign taxing jurisdictions. The Company is currently under examination for certain subsidiary companies in Vietnam for the years ended June 30, 2017 through September 30, 2021; Malaysia for the years ended June 30, 2021 through June 30, 2023; Singapore for the year ended June 30, 2023; United Kingdom for the year ended June 30, 2023; and Germany for the years ended June 30, 2012 through June 30, 2021. The Company believes its income tax reserves for these tax matters are adequate.

**Note 9. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity and Redeemable Preferred Stock**

As of June 30, 2025, the Company's amended and restated articles of incorporation authorize our board of directors, without the approval of our shareholders, to issue 5 million shares of our preferred stock. As of June 30, 2025, 2.3 million shares of mandatory preferred convertible shares have been authorized, none are outstanding; 75,000 shares of Series B-1 convertible preferred stock, no par value, have been issued and are outstanding; and 140,000 shares of Series B-2 convertible preferred stock, no par value, have been issued and are outstanding.

***Mandatory Convertible Preferred Stock***

In July 2020, we issued 2.3 million shares of Mandatory Convertible Preferred Stock.

All outstanding shares of Mandatory Convertible Preferred Stock were converted to 10,240,290 shares of Company Common Stock on July 3, 2023, at a conversion ratio of 4.4523, and no shares of Mandatory Convertible Preferred Stock are currently issued and outstanding.

***Series B Convertible Preferred Stock***

In March 2021, the Company issued 75,000 shares of Series B-1 Convertible Preferred Stock, no par value per share ("Series B-1 Preferred Stock"), for $10,000 per share, resulting in an aggregate purchase price of $750 million. On July 1, 2022, the Company issued 140,000 shares of Series B-2 Convertible Preferred Stock, no par value per share ("Series B-2 Preferred Stock" and, together with the Series B-1 Preferred Stock, the "Series B Preferred Stock"), for $10,000 per share and an aggregate purchase price of $1.4 billion.

The shares of Series B Preferred Stock are convertible into shares of Coherent Common Stock as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• at the election of the holder, each share of Series B Preferred Stock may be converted into shares of Coherent Common Stock at a conversion price of $85 per share (as it may be adjusted from time to time, the "Conversion Price"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• at the election of the Company at the then-applicable Conversion Price if the volume-weighted average price of Coherent Common Stock exceeds 150% of the then-applicable Conversion Price for 20 trading days out of any 30 consecutive trading days.

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The issued shares of Series B Preferred Stock currently have voting rights, voting as one class with the Coherent Common Stock, on an as-converted basis, subject to limited exceptions.

On or at any time after March 31, 2031 and July 1, 2032 for the Series B-1 and B-2 Preferred Stock, respectively:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each holder has the right to require the Company to redeem all of their Series B Preferred Stock, for cash, at a redemption price per share equal to the sum of the Stated Value (as defined in the Statement with Respect to Shares establishing the Series B Preferred Stock) for such shares plus an amount equal to all accrued or declared and unpaid dividends on such shares that had not previously been added to the Stated Value (such price the "Redemption Price," and such right the "Put Right"), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the Company has the right to redeem, in whole or in part, on a pro rata basis from all holders based on the aggregate number of shares of Series B Preferred Stock outstanding, for cash, at the Redemption Price.

In connection with any Fundamental Change (as defined in the Statement with Respect to Shares establishing the Series B Preferred Stock), and subject to the procedures set forth in the Statement with Respect to Shares establishing the Series B Preferred Stock, the Company must, or will cause the survivor of a Fundamental Change to, make an offer to repurchase, at the option and election of the holder thereof, each share of Series B-1 Preferred Stock then outstanding at a purchase price per share in cash equal to (i) the Stated Value for such shares plus an amount equal to all accrued or declared and unpaid dividends on such shares that had not previously been added to the Stated Value as of the date of repurchase plus (ii) if prior to March 31, 2026 and July 1, 2027, for the Series B-1 and B-2 Preferred Stock, respectively, the aggregate amount of all dividends that would have been paid (subject to certain exceptions), from the date of repurchase through March 31, 2026 and July 1, 2027, for the Series B-1 and B-2 Preferred Stock, respectively.

If the Company defaults on a payment obligation with respect to the Series B Preferred Stock, and such default is not cured within 30 days, the dividend rate will increase to 8% per annum and will be increased by an additional 2% per annum each quarter the Company remains in default, not to exceed 14% per annum.

The Series B Preferred Stock is redeemable for cash outside of the control of the Company upon the exercise of the Put Right, and upon a Fundamental Change, and is therefore classified as mezzanine equity.

The Series B Preferred Stock is initially measured at fair value less issuance costs, accreted to its redemption value over a 10-year period (using the effective interest method) with such accretion accounted for as deemed dividends and reductions to Net Earnings (Loss) available to Common Shareholders.

Preferred stock dividends are presented as a reduction to Retained earnings on the Consolidated Balance Sheets.

The following table presents dividends per share and dividends recognized for the years ended June 30, 2025, and June 30, 2024:

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| | | |
|:---|:---|:---|
| | **Year Ended June 30, 2025** | **Year Ended June 30, 2024** |
| Dividends per share | $604 | $574 |
| Dividends ($000) | 123688 | 117894 |
| Deemed dividends ($000) | 6238 | 5463 |

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**Note 10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings Per Share**

Basic earnings (loss) per common share is computed by dividing net earnings (loss) available to the common shareholders by the weighted-average number of shares of common stock outstanding during the period.

Diluted earnings (loss) per common share is computed by dividing the diluted earnings (loss) available to the common shareholders by the weighted-average number of shares of common stock and potentially dilutive shares of common stock outstanding during the period. The dilutive effect of equity awards is calculated based on the average stock price for each fiscal period, using the treasury stock method. The shares of Coherent Common Stock issuable upon conversion of the Series B Convertible Preferred Stock are calculated under the If-Converted method. For the years ended June 30, 2025, June 30, 2024 and June 30, 2023, as the Company was in a net loss position, there were no dilutive shares. For the years ended June 30, 2025, June 30, 2024 and June 30, 2023, diluted earnings (loss) per share excluded the potentially dilutive effect of the performance and restricted shares, as well as the shares of Coherent Common Stock issuable upon conversion of the Series B Convertible Preferred Stock as their effects were anti-dilutive.

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The following is a reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations for the periods presented ($000, except per share):

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| | | | |
|:---|:---|:---|:---|
| **Year Ended June 30,** | **2025** | **2024** | **2023** |
| **Numerator** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net earnings (loss) attributable to Coherent Corp. | $49364 | $(156154) | $(259458) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deduct Series A preferred stock dividends |  |  | (27600) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deduct Series B dividends and deemed dividends | (129926) | (123357) | (116612) |
| **Basic loss available to the common shareholders** | $(80562) | $(279511) | $(403670) |
| **Diluted loss available to the common shareholders** | $(80562) | $(279511) | $(403670) |
| **Denominator** |  |  |  |
| **Diluted weighted average common shares** | 154755 | 151642 | 137578 |
| **Basic loss per common share** | $(0.52) | $(1.84) | $(2.93) |
| **Diluted loss per common share** | $(0.52) | $(1.84) | $(2.93) |

---

The following table presents potential shares of common stock excluded from the calculation of diluted net earnings (loss) per share, as their effect would have been antidilutive (in thousands of shares):

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| | | | |
|:---|:---|:---|:---|
| **Year Ended June 30,** | **2025** | **2024** | **2023** |
| Series A Mandatory Convertible Preferred Stock |  |  | 10423 |
| Series B Convertible Preferred Stock | 29103 | 27691 | 26349 |
| Common stock equivalents | 4548 | 2940 | 2271 |
| &nbsp;&nbsp;Total anti-dilutive shares | 33651 | 30631 | 39043 |

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**Note 11. &nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling Interests**

On December 4, 2023, Silicon Carbide LLC ("Silicon Carbide"), one of the Company's subsidiaries, completed (i) the sale of 16,666,667 Class A Common Units to Denso Corporation ("Denso") for $500,000,000 pursuant to an Investment Agreement, dated as of October 10, 2023, by and between Silicon Carbide and Denso and (ii) the sale of 16,666,667 Class A Common Units to Mitsubishi Electric Corporation ("MELCO") for $500,000,000 pursuant to an Investment Agreement, dated as of October 10, 2023, by and between Silicon Carbide and MELCO (collectively, the "Equity Investments").

As a consequence of the Equity Investments, the Company's ownership interest in the Class A Common Units of Silicon Carbide LLC was reduced to approximately 75%. Denso and MELCO each, individually, own approximately 12.5% of the Class A Common Units of Silicon Carbide LLC.

The Equity Investments in Silicon Carbide enables Coherent to increase its available free cash flow to provide greater financial and operational flexibility to execute its capital allocation priorities, as the aggregate $1 billion investment, net of transaction costs, is being and will continue to be used to fund future capital expansion of Silicon Carbide.

The following table presents the activity in noncontrolling interests in Silicon Carbide ($000):

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| | | |
|:---|:---|:---|
| **Year Ended June 30,** | **2025** | **2024** |
| Beginning balance | $371392 | $— |
| &nbsp;&nbsp;&nbsp;Sale of shares to noncontrolling interests |  | 373573 |
| &nbsp;&nbsp;&nbsp;Share of foreign currency translation adjustments | 1423 | 429 |
| &nbsp;&nbsp;&nbsp;Net loss | (19307) | (2610) |
| Ending balance | $353508 | $371392 |

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**Note 12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leases**

The determination of whether an arrangement is, or contains, a lease is performed at the inception of the arrangement. Classification and initial measurement of the right-of-use asset and lease liability are determined at the lease commencement

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date. The Company elected the short-term lease measurement and recognition exemption; therefore, leases with an initial term of 12 months or less are not recorded on the balance sheet.

Finance leases are generally those that allow us to substantially utilize or pay for the entire asset over its estimated useful life. Finance lease assets are recorded in Property, plant and equipment, net, and finance lease liabilities within Other accrued liabilities and Other liabilities on our Consolidated Balance Sheets. Finance lease assets are amortized in operating expenses on a straight-line basis over the shorter of the estimated useful lives of the assets or the lease term, with the interest component for lease liabilities included in interest expense and recognized using the effective interest method over the lease term.

Operating leases are recorded in Other assets and Operating lease liabilities, current and non-current on our Consolidated Balance Sheets. Operating lease assets are amortized on a straight-line basis in operating expenses over the lease term.

Our lease liabilities are recognized based on the present value of the remaining fixed lease payments, over the lease term, using a discount rate of similarly secured borrowings available to the Company. For the purpose of lease liability measurement, we consider only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred. We account for non-lease components, such as common area maintenance, as a component of the lease, and include it in the initial measurement of our lease assets and corresponding liabilities. Our lease terms and conditions may include options to extend or terminate. An option is recognized when it is reasonably certain that we will exercise that option.

Our lease assets also include any lease payments made, and exclude any lease incentives received prior to commencement. Our lease assets are tested for impairment in the same manner as long-lived assets used in operations.

The following table presents lease costs, which include leases for arrangements with an initial term of more than 12 months, lease term, and discount rates ($000):

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| | | | |
|:---|:---|:---|:---|
| **Year Ended June 30,** | **2025** | **2024** | **2023** |
| **Finance lease cost** |  |  |  |
| &nbsp;&nbsp;Amortization of right-of-use assets | $1528 | $1667 | $1667 |
| &nbsp;&nbsp;Interest on lease liabilities | 947 | 1040 | 1124 |
| **Total finance lease cost** | 2475 | 2707 | 2791 |
| &nbsp;&nbsp;Operating lease cost | 59213 | 52909 | 53127 |
| **Total lease cost** | $61688 | $55616 | $55918 |
| **Cash paid for amounts included in the measurement of lease liabilities** |  |  |  |
| Operating cash flows from finance leases | $947 | $1040 | $1124 |
| Operating cash flows from operating leases | 58117 | 50672 | 50503 |
| Financing cash flows from finance leases | 1749 | 1584 | 1430 |
| **Assets obtained in exchange for lease liabilities** |  |  |  |
| &nbsp;&nbsp;Right-of-use assets obtained in acquisitions | $— | $— | $56315 |
| &nbsp;&nbsp;Right-of-use assets obtained in exchange for new operating lease liabilities | 51357 | 64385 | 27720 |
| **Total assets obtained in exchange for new operating lease liabilities** | $51357 | $64385 | $84035 |
| **Weighted-average remaining lease term (in years)** |  |  |  |
| Finance leases | 6.5 | 7.5 | 8.5 |
| Operating leases | 6.2 | 6.6 | 6.9 |
| **Weighted-average discount rate** |  |  |  |
| Finance leases | 5.6% | 5.6% | 5.6% |
| Operating leases | 6.9% | 6.8% | 5.5% |

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The following table presents future minimum lease payments, which includes leases for arrangements with an initial term of more than 12 months ($000):

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| | | | |
|:---|:---|:---|:---|
| **Future Years** | **Operating Leases** | **Finance Leases** | **Total** |
| Year 1 | $57830 | $2771 | $60601 |
| Year 2 | 47261 | 2847 | 50108 |
| Year 3 | 34712 | 2925 | 37637 |
| Year 4 | 32103 | 3006 | 35109 |
| Year 5 | 21712 | 3088 | 24800 |
| Thereafter | 69092 | 4669 | 73761 |
| Total minimum lease payments | $262710 | $19306 | $282016 |
| Less: amounts representing interest | 55973 | 3172 | 59145 |
| Present value of total lease liabilities | $206737 | $16134 | $222871 |

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**Note 13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-Based Compensation**

The Company grants equity awards pursuant to the Coherent Corp. Omnibus Incentive Plan (as amended and restated, the "Plan"). The Plan was originally approved by the Company's shareholders at the Annual Meeting in November 2018, and was subsequently amended, restated and approved by the Company's shareholders at the Annual Meetings held in November 2020, November 2023 and November 2024. The Plan provides for the grant of stock options, stock appreciation rights, restricted shares, restricted share units, deferred shares, performance shares and performance units to employees (including officers), consultants and directors of the Company. The maximum number of shares of Coherent Common Stock authorized for issuance under the Plan is limited to 13,450,000 shares of Coherent Common Stock, not including any remaining shares forfeited under the predecessor plans that may be rolled into the Plan. Certain awards under the Plan have certain vesting provisions predicated upon the death, retirement or disability of the grantee.

As of June 30, 2025, there were approximately 8 million shares available to be issued under the Plan, including forfeited shares from predecessor plans.

On June 3, 2024, the Board of Directors granted 147,214 restricted stock units vesting over three years from date of grant and 694,007 performance stock units vesting over the approximate three-year period ending June 30, 2027, to the new CEO. The grants were non-Plan "employment inducement awards" as contemplated by the New York Stock Exchange Listing Rule 303A.08 and therefore were not made pursuant to the Plan.

On October 11, 2024, the Board of Directors granted 15,902 and 63,154 restricted stock units vesting over three years and two years, respectively, from date of grant and 118,853 performance stock units vesting over the approximate three-year period ending June 30, 2027, to the new CFO. The grants were "employment inducement awards" as contemplated by the New York Stock Exchange Listing Rule 303A.08 and therefore were not made pursuant to the Plan.

The Company has an Employee Stock Purchase Plan whereby eligible employees may authorize payroll deductions (subject to certain limitations) of up to 15% (or such lessor amount as may be determined by the plan administrator) of their wages and base salary to purchase shares at an amount which will not be less than 85% of lower of (i) the fair market value of the common stock on the first trading day of the offering period and (ii) the fair market value of the common stock on the last trading day of the approximately six-month offering period.

We record share-based compensation expense for these awards, which requires the recognition of the grant-date fair value of share-based compensation in net earnings. We recognize the share-based compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period. We account for cash-based stock appreciation rights, cash-based restricted share units and cash-based performance share units as liability awards.

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Share-based compensation expense for the fiscal years ended June 30, 2025, 2024 and 2023 is as follows ($000):

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| | | | |
|:---|:---|:---|:---|
| **Year Ended June 30,** | **2025** | **2024** | **2023** |
| Stock Options and Cash-Based Stock Appreciation Rights | $334 | $1149 | $2602 |
| Restricted Share Awards and Cash-Based Restricted Share Unit Awards | 93223 | 92634 | 124212 |
| Performance Share Awards and Cash-Based Performance Share Unit Awards | 57767 | 21912 | 14998 |
| Employee Stock Purchase Plan | 9648 | 11200 | 7819 |
|  | $160972 | $126895 | $149631 |

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***Stock Options and Cash-Based Stock Appreciation Rights***

We utilize the Black-Scholes valuation model for estimating the fair value of stock options and cash-based stock appreciation rights. During the fiscal years ended June 30, 2025, June 30, 2024 and June 30, 2023, no stock options were issued.

Stock option and cash-based stock appreciation rights activity during the fiscal year ended June 30, 2025 was as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Stock Options** | **Stock Options** | **Cash-Based Stock Appreciation Rights** | **Cash-Based Stock Appreciation Rights** |
| | **Number of<br>Shares** | **Weighted Average<br>Exercise Price** | **Number of<br>Rights** | **Weighted Average<br>Exercise Price** |
| Outstanding - June 30, 2024 | 1490645 | $32.62 | 46871 | $35.48 |
| Exercised | (575097) | $28.16 | (21198) | $34.26 |
| Forfeited and Expired | (18452) | $34.89 | (540) | $16.29 |
| Outstanding - June 30, 2025 | 897096 | $35.43 | 25133 | $36.93 |
| Exercisable - June 30, 2025 | 897096 | $35.43 | 25133 | $36.93 |

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As of June 30, 2025, 2024 and 2023, the aggregate intrinsic value of stock options and cash-based stock appreciation rights outstanding and exercisable was $50 million, $61 million and $44 million, respectively. Aggregate intrinsic value represents the total pretax intrinsic value (the difference between our closing stock price on the last trading day of the year ended June 30, and the option's exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2025. This amount varies based on the fair market value of the Company's stock. The total intrinsic value of stock options and cash-based stock appreciation rights exercised during the fiscal years ended June 30, 2025, 2024, and 2023 was $36 million, $25 million, and $5 million, respectively. As of June 30, 2025, there was no unrecognized compensation cost related to non-vested stock options and cash-based stock appreciation rights.

Outstanding and exercisable stock options at June 30, 2025 were as follows:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Stock Options and Cash-Based Stock<br>Appreciation Rights Outstanding** | **Stock Options and Cash-Based Stock<br>Appreciation Rights Outstanding** | **Stock Options and Cash-Based Stock<br>Appreciation Rights Outstanding** | **Stock Options and Cash-Based Stock<br>Appreciation Rights Exercisable** | **Stock Options and Cash-Based Stock<br>Appreciation Rights Exercisable** | **Stock Options and Cash-Based Stock<br>Appreciation Rights Exercisable** |
|<br>**Range of**<br>**Exercise Prices** | **Number of**<br>**Shares or**<br>**Rights** | **Weighted<br>Average Remaining**<br>**Contractual Term**<br>**(Years)** | **Weighted<br>Average**<br>**Exercise**<br>**Price** | **Number of**<br>**Shares or**<br>**Rights** | **Weighted<br>Average Remaining**<br>**Contractual Term**<br>**(Years)** | **Weighted<br>Average**<br>**Exercise**<br>**Price** |
| $13.34 - $18.06 | 15584 | 0.13 | $17.84 | 15584 | 0.13 | $17.84 |
| $18.07 - $24.34 | 188290 | 1.08 | $21.50 | 188290 | 1.08 | $21.50 |
| $24.35 - $35.38 | 190302 | 2.39 | $34.59 | 190302 | 2.39 | $34.59 |
| $35.39 - $36.89 | 322676 | 4.24 | $36.41 | 322676 | 4.24 | $36.41 |
| $36.90 - $49.90 | 205377 | 3.09 | $48.94 | 205377 | 3.09 | $48.94 |
|  | 922229 | 2.89 | $35.47 | 922229 | 2.89 | $35.47 |

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***Restricted Share Awards, Restricted Share Units, and Cash-Based Restricted Share Units***

Restricted share awards, restricted share units, and cash-based restricted share units compensation expense was calculated based on the number of shares or units expected to be earned by the grantee multiplied by the stock price at the date of grant (for restricted share awards and restricted share units) or the stock price at the period end date (for cash-based restricted share units), and is being recognized over the vesting period. Generally, the restricted share awards, restricted share units, and cash-based restricted share units have a three-year tranche vesting provision. There were no restricted share awards issued in the fiscal years ending June 30, 2025 and June 30, 2024, and all previous restricted share awards have been amortized in full.

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Restricted share unit and cash-based restricted share unit activity during the fiscal year ended June 30, 2025, was as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Restricted Share Units** | **Restricted Share Units** | **Cash-Based Restricted Share Units** | **Cash-Based Restricted Share Units** |
| | **Number of<br>Units** | **Weighted Average<br>Grant Date <br>Fair Value** | **Number of<br>Units** | **Weighted Average<br>Grant Date <br>Fair Value** |
| Nonvested - June 30, 2024 | 4067885 | $45.84 | 8984 | $43.00 |
| Granted | 1554412 | $81.70 | 5031 | $77.59 |
| Vested | (2237173) | $47.82 | (3968) | $46.93 |
| Forfeited | (199172) | $56.25 | (348) | $55.98 |
| Nonvested - June 30, 2025 | 3185952 | $61.13 | 9699 | $59.49 |

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As of June 30, 2025, total unrecognized compensation cost related to non-vested, restricted share units and cash-based restricted share units was $119 million. This cost is expected to be recognized over a weighted-average period of approximately 2 years. The restricted share unit compensation expense was calculated based on the number of shares expected to be earned, multiplied by the stock price at the date of grant, and is being recognized over the vesting period. The cash-based restricted share unit compensation expense was calculated based on the number of units expected to be earned, multiplied by the stock price at the period-end date, and is being recognized over the vesting period. The total fair value of the restricted share awards, restricted share units, and cash-based restricted share units granted during the years ended June 30, 2025, 2024 and 2023, was $127 million, $110 million and $102 million, respectively. The total fair value of restricted share awards, restricted share units and cash-based restricted share units vested was $185 million, $74 million and $131 million during fiscal years 2025, 2024 and 2023, respectively.

***Performance Share Units***

The Compensation Committee of the Board of Directors of the Company has granted certain executive officers and employees performance share units under the Plan. As of June 30, 2025, we had outstanding grants covering performance periods ranging from 12 to 36 months. These grants are intended to provide continuing emphasis on specified financial performance goals that the Company considers important contributors to the creation of long-term shareholder value. These grants are payable only if the Company achieves specified levels of financial performance during the performance periods.

For our relative Total Shareholder Return ("TSR") performance-based units, which are based on market performance of our stock as compared to the S&P Composite 1500 – Electronic Equipment, Instruments & Components Index, the compensation cost is recognized over the performance period on a straight-line basis, because the grants vest only at the end of the measurement period, and the probability of actual shares expected to be earned is considered in the grant date valuation. As a result, the expense is not adjusted to reflect the actual shares earned. We estimate the fair value of the TSR performance-based units using the Monte-Carlo simulation model.

The performance share unit compensation expense was calculated based on the number of shares expected to be earned, multiplied by the stock price at the date of grant, and is being recognized over the vesting period.

Performance share unit activity relating to the Plan during the year ended June 30, 2025, was as follows:

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| | | |
|:---|:---|:---|
| | **Performance Share Units** | **Performance Share Units** |
| | **Number of Units** | **Weighted Average Grant Date Fair Value** |
| Nonvested - June 30, 2024 | 1702741 | $73.86 |
| Granted | 644174 | $136.38 |
| Vested | (131239) | $81.32 |
| Forfeited | (77542) | $77.91 |
| Nonvested - June 30, 2025 | 2138134 | $92.11 |

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As of June 30, 2025, total unrecognized compensation cost related to non-vested performance share units was $125 million. This cost is expected to be recognized over a weighted-average period of approximately 1.70 years. The total fair value of the performance share units granted during the fiscal years ended June 30, 2025, 2024 and 2023 was $88 million, $113 million and $27 million, respectively. The total fair value of performance share units and cash-based performance share units vested during the fiscal years ended June 30, 2025, 2024 and 2023 was $17 million, $14 million and $24 million, respectively.

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 **Note 14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Segment and Geographic Reporting**

The Company's businesses are organized and managed into segments based on similarities in products and services. Segment determination reflects how the chief operating decision-maker ("CODM") evaluates the Company's operations for decision-making operating decisions and performance assessment. Effective July 1, 2025, the Company realigned its organizational structure and now identifies multiple operating segments, which are aggregated into two reportable segments: (i) Datacenter & Communications, and (ii) Industrial. In accordance with ASC 280 "Segment Reporting," the aggregation of the company's segments is based on similarities in economic characteristics, product and service types, production processes, type or class of customers, and distribution methods. Previously, financial results had been reported in the following three segments: (i) Networking, (ii) Materials, and (iii) Lasers. Comparative prior period segment information has been recast to conform to the new segments.

The Datacenter & Communications segment has locations in the United States, Australia, China, Germany, Malaysia, South Korea, Sweden, Switzerland, Thailand, the Philippines and Vietnam. This segment sells primarily into the datacenter and communications market, including transceivers, systems, subsystems, modules, components, optics, and semiconductor devices.

The Industrial segment has locations in the United States, China, Finland, Germany, Italy, Japan, Malaysia, Singapore, South Korea, Spain, Sweden, Taiwan, the Philippines, the United Kingdom and Vietnam. This segment sells primarily into the industrial market, which includes lasers, systems, optics, components and materials for semiconductor and display capital equipment, precision manufacturing, life sciences, consumer electronics, scientific research and automotive and market applications.

Our CODM receives and reviews financial information based on the operating segments that are aggregated into the two reportable segments. Our CODM evaluates each segment's performance and allocates resources based on segment revenue and segment profit, as our CODM believes segment profit is a more comprehensive profitability measure for each operating segment. Our CODM is regularly provided with segment revenue and segment profit information to assess performance of each segment. Segment profit includes operating expenses directly managed by operating segments, including research and development, direct sales, marketing and administrative expenses. Segment profit does not include share-based compensation, acquisition or integration related costs, amortization and impairment of acquisition-related intangible assets, restructuring charges, impairment charges on assets held-for-sale, gain on sale of businesses and certain other charges or gains. Additionally, we do not allocate Corporate strategic research and development, strategic marketing and sales expenses and shared general and administrative expenses, as these expenses are not directly attributable to our operating segments. The segments are managed separately due to the unique products and markets that each serves. The Company derives its reportable segment results based on how financial information is reported and aggregated within its management reporting system. The CODM uses segment profit as a key metric in the forecasting process and in making decisions related to capital allocation and resource deployment across segments. The accounting policies are consistent across each segment. Assets by segment are not a measure used to assess the performance of the company by the CODM and thus are not reported in our disclosures.

The following table summarizes selected financial information of our operations by segment and reconciles segment profit to consolidated earnings (loss) before income taxes for the periods presented ($000):

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---

| | | | |
|:---|:---|:---|:---|
| | **Year Ended June 30,** | **Year Ended June 30,** | **Year Ended June 30,** |
| | **2025** | **2024** | **2023** |
| Segment revenue |  |  |  |
| &nbsp;&nbsp;Datacenter & Communications | $3755164 | $2631369 | $2966426 |
| &nbsp;&nbsp;Industrial | 2054951 | 2076319 | 2193674 |
| Total segment revenue | 5810115 | 4707688 | 5160100 |
| Intersegment revenue |  |  |  |
| &nbsp;&nbsp;Datacenter & Communications | 38584 | 36504 | 40210 |
| &nbsp;&nbsp;Industrial | 77108 | 55098 | 34987 |
| &nbsp;&nbsp;Elimination of intersegment revenue | (115692) | (91602) | (75197) |
| Total intersegment revenue |  |  |  |
| Segment cost of goods sold and operating expenses <sup>(1)</sup> |  |  |  |
| &nbsp;&nbsp;Datacenter & Communications | 2889961 | 2167905 | 2302216 |
| &nbsp;&nbsp;Industrial | 1724569 | 1833711 | 1821430 |
| Total segment cost of goods sold and operating expenses | 4614530 | 4001616 | 4123646 |
| Segment profit |  |  |  |
| &nbsp;&nbsp;Datacenter & Communications | 903787 | 499968 | 704420 |
| &nbsp;&nbsp;Industrial | 407490 | 297706 | 407231 |
| Total segment profit | 1311277 | 797674 | 1111651 |
| Unallocated Corporate expenses |  |  |  |
| &nbsp;&nbsp;Corporate and centralized function costs <sup>(2)</sup> | (274333) | (179624) | (184479) |
| &nbsp;&nbsp;Share-based compensation | (160972) | (126895) | (149631) |
| &nbsp;&nbsp;Restructuring costs <sup>(3)</sup> | (160081) | (27054) | (119101) |
| &nbsp;&nbsp;Impairment of assets held-for-sale | (84988) |  |  |
| &nbsp;&nbsp;Integration, site consolidation and other costs <sup>(4)</sup> | (38237) | (79820) | (81503) |
| &nbsp;&nbsp;Amortization of intangibles | (302788) | (288160) | (414125) |
| &nbsp;&nbsp;Interest expense | (243251) | (288475) | (286872) |
| &nbsp;&nbsp;Purchase accounting adjustments |  |  | (157500) |
| &nbsp;&nbsp;Transaction costs |  |  | (38652) |
| &nbsp;&nbsp;Other (income) expense, net | 47554 | 44707 | (31566) |
| &nbsp;&nbsp;Other |  |  | (3780) |
| Earnings before income taxes | $94181 | $(147647) | $(355558) |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The significant expense category amount aligns with the segment-level information that is regularly provided to the CODM. Segment cost of goods sold and operating expenses primarily include manufacturing costs, labor and research and development costs, and exclude expenses and credits that are included in the Unallocated corporate expenses category.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)We do not allocate corporate and centralized function costs that are not directly attributable to our operating segments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)See Note 20. Restructuring Plans for further information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Integration and site consolidation costs in the year ended June 30, 2025 includes $35 million in consulting and legal costs related to projects to integrate recent acquisitions into common technology systems and simplify legal entity structure, $2 million of employee severance and retention costs related to sites being shut down as part of our Synergy and Site Consolidation Plan, and $1 million of executive transition costs. Integration and site consolidation costs in the year ended June 30, 2024 primarily include $40 million in consulting costs related to projects to integrate recent

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acquisitions into common technology systems and simplify legal entity structure, and $40 million of employee severance and retention and other costs related to sites being shut down as part of our 2023 Restructuring Plan or Synergy and Site Consolidation Plan. Integration and site consolidation costs in the year ended June 30, 2023 primarily include $46 million in consulting costs related to projects to integrate recent acquisitions into common technology systems and simplify legal entity structure, and $36 million of employee severance and retention and other costs related to sites being shut down as part of our 2023 Restructuring Plan or Synergy and Site Consolidation Plan.

The following tables summarizes depreciation and amortization by segment ($000):

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended June 30,** | **Year Ended June 30,** | **Year Ended June 30,** |
| Depreciation and amortization | **2025** | **2024** | **2023** |
| &nbsp;&nbsp;Datacenter & Communications | $209293 | $213693 | $247771 |
| &nbsp;&nbsp;Industrial | 339377 | 340601 | 427819 |
| &nbsp;&nbsp;Corporate and shared services | 4928 | 5467 | 6097 |
| Total depreciation and amortization | $553598 | $559761 | $681687 |

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Geographic information for revenues by location of the customer's headquarters were as follows ($000):

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| | | | |
|:---|:---|:---|:---|
| | **Revenues** | **Revenues** | **Revenues** |
|<br>**Year Ended June 30,** | **2025** | **2024** | **2023** |
| North America | $3564846 | $2622569 | $2745891 |
| Europe | 698800 | 714282 | 979911 |
| China | 680110 | 621918 | 577180 |
| Japan | 390610 | 340863 | 392479 |
| Rest of World | 475749 | 408056 | 464639 |
| Total | $5810115 | $4707688 | $5160100 |

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**Major Customers**

We had two major customers who accounted for 12% and 10% of consolidated revenue during fiscal 2025. We had a different major customer who accounted for 10% of consolidated revenue during fiscal 2024. We had a major customer who accounted for 10% of consolidated revenue during fiscal 2023. These customers purchased primarily from our Datacenter & Communications segment.

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Geographic information for long-lived assets by country, which include property, plant and equipment, net of related depreciation, and certain other long-term assets, were as follows ($000):

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| | | |
|:---|:---|:---|
| | **Long-Lived Assets** | **Long-Lived Assets** |
|<br>**June 30,** | **2025** | **2024** |
| United States | $1092389 | $1226359 |
| Non-United States |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;China | 402960 | 349195 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Malaysia | 196543 | 87783 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Germany | 189281 | 209593 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vietnam | 65565 | 20707 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sweden | 51032 | 44733 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Switzerland | 49602 | 44256 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Philippines | 25406 | 11217 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;United Kingdom | 20594 | 19153 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Korea | 16037 | 17862 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Australia | 9014 | 8611 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taiwan | 6063 | 6705 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 23044 | 23166 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Non-United States | 1055141 | 842981 |
|  | $2147530 | $2069340 |

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**Note 15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair Value of Financial Instruments**

The FASB defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous markets for the asset and liability in an orderly transaction between market participants at the measurement date. We estimate fair value of our financial instruments utilizing an established three-level hierarchy in accordance with U.S. GAAP. The hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 1 – Valuation is based upon unadjusted quoted prices for identical assets or liabilities in active markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instruments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Level 3 – Valuation is based upon other unobservable inputs that are significant to the fair value measurements.

The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to the measurement.

We had entered into an interest rate swap with a notional amount of $1,075 million to limit the exposure to our variable interest rate debt by effectively converting it to a fixed interest rate. Through February 28, 2023, we received payments based on the one-month LIBOR and made payments based on a fixed rate of 1.52%. We received payments with a floor of 0.00%. The initial notional amount of the interest rate swap decreased to $825 million in June 2022, and remained at that amount through its expiration on September 24, 2024. On March 20, 2023, we amended our $825 million interest rate swap ("Amended Swap"), effective as of February 28, 2023, to replace the current reference rate (LIBOR) with SOFR, to be consistent with Amendment no. 1 to the Credit Agreement. See Note 7. Debt for further information. Under the Amended Swap, we received payments based on the one-month SOFR and made payments based on a fixed rate of 1.42%. Through its expiration on September 24, 2024, we received payments with a floor of 0.10%. We designated this instrument as a cash flow hedge, and deemed the hedge relationship effective at inception of the contract and the amended contract. The interest rate swap expired on September 30, 2024. The fair value of the interest rate swap of $8 million is recognized in the Consolidated Balance Sheet within Prepaid and other current assets and Other assets as of June 30, 2024.

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On February 23, 2022, we entered into an interest rate cap ("the Cap") with an effective date of July 1, 2023. On March 20, 2023, we amended the Cap to replace the current reference rate (LIBOR) with SOFR, to be consistent with Amendment No. 1 to the Credit Agreement. See Note 7. Debt for further information. The Cap manages our exposure to interest rate movements on a portion of our floating rate debt. The Cap provides us with the right to receive payment if one-month SOFR exceeds 1.92%. Beginning in July 2023, we began to pay a fixed monthly premium based on an annual rate of 0.853% for the Cap. The Cap will carry a notional amount ranging from $500 million to $1,500 million. On September 1, 2024, we increased the notional amount from $500 million to $1,500 million. The fair value of the interest rate cap of $17 million and $50 million is recognized in the Consolidated Balance Sheets within prepaid and other current and other assets as of June 30, 2025 and June 30, 2024, respectively.

The Cap, as amended, is designed to mirror the terms of the Company's Credit Agreement as amended on March 31, 2023. We designated the Cap as a cash flow hedge of the variability of the SOFR based interest payments on the Term Facilities. Every period over the life of the hedging relationship, the entire change in fair value related to the hedging instrument will first be recorded within AOCI. Amounts accumulated in AOCI will be reclassified into interest expense in the same period or periods in which interest expense is recognized on the Credit Agreement, or its direct replacement. The fair value of the Cap is determined using widely accepted valuation techniques and reflects the contractual terms of the Cap including the period to maturity, and while there are no quoted prices in active markets, it uses observable market-based inputs, including interest rate curves. The fair value analysis also considers a credit valuation adjustment to reflect nonperformance risk of both the Company and the single counterparty. The Cap is classified as a Level 2 item within the fair value hierarchy.

We estimated the fair value of the Senior Notes, Term A Facility and Term B Facility ("Debt Facilities") based on quoted market prices as of the last trading day prior to June 30, 2025; however, the Debt Facilities have only a limited trading volume and as such this fair value estimate is not necessarily the value at which the Debt Facilities could be retired or transferred. We concluded that this fair value measurement should be categorized within Level 2. The carrying values of the Debt Facilities are net of unamortized discount and issuance costs. See Note 7. Debt for further information on the Company's debt facilities.

The fair value and carrying value of the Debt Facilities were as follows ($000):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2025** | **June 30, 2024** | **June 30, 2024** |
| | **Fair Value** | **Carrying Value** | **Fair Value** | **Carrying Value** |
| Senior Notes | $973190 | $985034 | $938193 | $984061 |
| Term A Facility | 632960 | 616234 | 777564 | 762039 |
| Term B Facility | 2108938 | 2065880 | 2390497 | 2334701 |

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Our borrowings, including our lease obligations and the Debt Facilities, are considered Level 2 among the fair value hierarchy.

Cash and cash equivalents are considered Level 1 among the fair value hierarchy and approximate fair value because of the short-term maturity of those instruments.

At June 30, 2025, total restricted cash of $724 million includes $720 million of cash in Silicon Carbide LLC that is restricted for use only by that subsidiary and $4 million of cash restricted for other purposes in other entities. At June 30, 2024, total restricted cash of $864 million included $858 million of cash in Silicon Carbide LLC that is restricted for use only by that subsidiary and $5 million of cash restricted for other purposes in other entities. The restricted cash is invested in money market accounts and time deposits, with maturities of one year or less, that are held-to-maturity, are considered Level 1 among the fair value hierarchy and approximate fair value. Restricted cash that is expected to be spent and released from restriction after 12 months is classified as non-current on the Consolidated Balance Sheets.

We, from time to time, purchase foreign currency forward exchange contracts, that permit us to sell specified amounts of these foreign currencies for pre-established U.S. dollar amounts at specified dates that represent assets or liabilities on the balance sheets of certain subsidiaries. These contracts are entered into for the purposes of limiting translational exposure to changes in currency exchange rates and which otherwise would expose our earnings, on the revaluation of our aggregate net assets or liabilities in respective currencies, to foreign currency risk. At June 30, 2025, we had no foreign currency forward contracts. The fair values of these instruments, when outstanding, are measured using valuations based upon quoted prices for similar assets and liabilities in active markets (Level 2) and are valued by reference to similar financial instruments, adjusted for credit risk and restrictions and other terms specific to the contracts. Realized gains related to these contracts for the year ended June 30, 2025 were $16 million and for June 30, 2024 and June 30, 2023 were losses of $15 million and gains of $0.2 million, respectively, and were included in Other expense (income), net in the Consolidated Statements of Earnings (Loss).

Our non-financial assets, such as goodwill, intangible assets, and property, plant and equipment, are assessed for impairment when an event or circumstance indicates that a decline in value may have occurred. See Note 1. Nature of Business and Summary of Significant Accounting Policies for further information.

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**Note 16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employee Benefit Plans**

Eligible employees of the Company participate in an employee retirement plan. Under the Coherent Corp 401(k) Profit Sharing Plan ("Plan"), we match employee contributions to the plan equal to an amount of 50% of employee contributions up to a maximum of 8% of the employee's individual earnings subject to IRS limitations. Employees become eligible for participation and Company matching contributions on their first day of employment. The Company's matching contributions (net of forfeitures) during fiscal 2025, 2024 and 2023 were $15 million, $18 million, and $11 million, respectively. In addition, the Plan has a profit sharing retirement plan contribution for eligible U.S. employees of the Company. These contributions are made at the discretion of the Company's Board of Directors and were $1 million for the year ended June 30, 2025 and $2 million in each of 2024 and 2023.

***Switzerland Defined Benefit Plan***

The Company maintains a pension plan covering employees of our Swiss subsidiary (the "Swiss Plan"). Employer and employee contributions are made to the Swiss Plan based on various percentages of salary and wages that vary according to employee age and other factors. Employer contributions to the Swiss Plan were $5 million and $4 million for the years ended June 30, 2025 and 2024, respectively. Net periodic pension cost is not material for any year presented.

The underfunded pension liability was $25 million and $17 million as of June 30, 2025 and 2024, respectively. The pension adjustment amount recognized in accumulated other comprehensive income (loss) was a $7 million decrease for both fiscal years ended June 30, 2025 and 2024. The accumulated benefit obligation was $141 million as of June 30, 2025, compared to $106 million as of June 30, 2024.

***Other Defined Benefit Plans***

As a result of the Coherent, Inc. acquisition on July 1, 2022, we assumed all assets and liabilities of defined benefit plans in the U.S., Germany, South Korea, Japan, Spain, and Italy ("other plans"). As is the customary practice with European and Asian companies, the plans are unfunded, with the exception of the Spanish plan which is partially funded. The U.S. qualified plan is also partially funded. Any new employees hired after January 1, 2007, are not eligible for the U.S. qualified and nonqualified plans. Effective August 31, 2018, both of the U.S. plans were amended to freeze all future compensation benefit accruals. Any new employees hired after 2000 are not eligible for the primary German pension plans. For two of the German plans and the U.S. qualified plan, unrealized gains and losses are recognized as a component of other comprehensive income (loss) within shareholders' equity. For the other plans, we have elected to recognize all actuarial gains and losses on these plans immediately, as incurred.

Liabilities and expense for pension benefits are determined using actuarial methodologies and incorporate significant assumptions, including the interest rate used to discount the future estimated cash flows, the expected long-term rate of return on plan assets, and several assumptions relating to the employee workforce (salary increases, retirement age, and mortality). All of these assumptions were based upon management's judgment, considering all known trends and uncertainties. Actual results that differ from these assumptions would impact future expense recognition and the cash funding requirements of our defined benefit plans.

For the other plans, employer contributions in the years ended June 30, 2025 and June 30, 2024 were $3 million and $2 million, respectively, and net periodic pension cost was not material in either year. The underfunded pension liability was $37 million and $34 million as of June 30, 2025 and June 30, 2024, respectively. The pension adjustment amount recognized in accumulated other comprehensive income (loss) was a $1 million increase and a $1 million decrease for the fiscal years ended June 30, 2025 and June 30, 2024, respectively. The accumulated benefit obligation was $47 million and $44 million as of June 30, 2025 and June 30, 2024, respectively.

Estimated future benefit payments under all plans are estimated to be as follows ($000):

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| | |
|:---|:---|
| **Year Ending June 30,** | |
| 2026 | $10400 |
| 2027 | 9400 |
| 2028 | 10100 |
| 2029 | 11500 |
| 2030 | 12100 |
| Next five years | 66800 |

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**Note 17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Accrued Liabilities**

The components of other accrued liabilities were as follows ($000):

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| | | |
|:---|:---|:---|
| **June 30,** | **2025** | **2024** |
| Contract liabilities | $62967 | $62123 |
| Warranty reserves | 32754 | 44193 |
| Current liabilities held-for-sale | 57394 |  |
| Other accrued liabilities | 182449 | 188390 |
|  | $335564 | $294706 |

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**Note 18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments and Contingencies**

We have purchase commitments for materials and supplies as part of the ordinary conduct of business. A portion of the commitments are long-term and are based on minimum purchase requirements. Certain short-term raw material purchase commitments have a variable price component which is based on market pricing at the time of purchase. Due to the proprietary nature of some of our materials and processes, certain contracts may contain liquidated damage provisions for early termination. We do not believe that a significant amount of liquidated damages are reasonably likely to be incurred under these commitments, based upon historical experience and current expectations. Total future purchase commitments held by Coherent as of June 30, 2025 were $945 million in fiscal 2025 and $147 million thereafter.

***Regulatory Matters***

In January 2025, we received an inquiry from BIS concerning past product sales to Huawei; we are cooperating with BIS's inquiry and conducting an internal review of those sales to determine what products are subject to EAR and consequently restricted for export, reexport, and transfer when Huawei is a party to the transaction. We have stopped shipping products to Huawei. We are in discussions with BIS regarding past product sales and cannot predict the outcome of those discussions. While we have received requests for additional information in this matter, we have not yet received any determination from BIS. In the event that we are found to have violated the EAR, we may be required to incur significant penalties and/or costs or expense as a result of the inquiry and to comply with, or remedy any violations of these regulations, but at this time, we are unable to determine an estimate or range of loss.

**Note 19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated Other Comprehensive Income (Loss)**

The changes in AOCI by component, net of tax, for the years ended June 30, 2025, 2024, and 2023 were as follows ($000):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Foreign<br>Currency<br>Translation<br>Adjustment** | **Interest<br>Rate<br>Instruments** | **Defined<br>Benefit<br>Pension Plan** | **Total<br>Accumulated Other<br>Comprehensive<br>Income (Loss)** |
| **AOCI - June 30, 2022** | $(34572) | $26041 | $6364 | $(2167) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income (loss) before reclassifications | 87927 | 49372 | (5326) | 131973 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts reclassified from AOCI |  | (19301) | (779) | (20080) |
| Net current-period other comprehensive income (loss) | 87927 | 30071 | (6105) | 111893 |
| **AOCI - June 30, 2023** | $53355 | $56112 | $259 | $109726 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income (loss) before reclassifications | (82318) | 24948 | (6708) | (64077) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts reclassified from AOCI |  | (45144) | (735) | (45880) |
| Net current-period other comprehensive income (loss) | (82318) | (20196) | (7443) | (109957) |
| &nbsp;&nbsp;&nbsp;&nbsp;AOCI - Reclass related to noncontrolling interests | 2871 |  |  | 2871 |
| **AOCI - June 30, 2024** | $(26092) | $35916 | $(7184) | $2640 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income (loss) before reclassifications | 409069 | 499 | (6064) | 403505 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts reclassified from AOCI |  | (32397) | (287) | (32685) |
| Net current-period other comprehensive income (loss) | 409069 | (31898) | (6351) | 370820 |
| &nbsp;&nbsp;&nbsp;&nbsp;AOCI - Reclass related to noncontrolling interests | (1423) |  |  | (1423) |
| **AOCI - June 30, 2025** | $381554 | $4018 | $(13535) | $372037 |

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The Company uses a portfolio approach to release the income tax effects in AOCI related to interest rate instruments and pension and postretirement benefits. Under this approach, the income tax effects are released from AOCI based on the pre-tax adjustments to interest rate instruments and pension liabilities or assets recognized within AOCI. Any tax effects remaining in AOCI are released only when the entire portfolio of the interest rate instruments or pension and postretirement benefits is liquidated, sold or extinguished.

**Note 20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructuring Plans**

**2023 Restructuring Plan**

On May 23, 2023, the Board of Directors approved the 2023 Plan which includes site consolidations, facilities moves and closures, as well as the relocation and requalification of certain manufacturing facilities. These restructuring actions were intended to realign our cost structure as part of a transformation to a simpler, more streamlined, resilient and sustainable business model. We evaluate restructuring charges in accordance with ASC 420, Exit or Disposal Cost Obligations, and ASC 712, Compensation-Nonretirement Post-Employment Benefits (ASC 712).

In fiscal 2025, these activities resulted in $53 million of charges primarily for impairment losses associated with the sale of our Newton Aycliffe business, impairment of ROU assets, employee termination costs, site move cost and accelerated depreciation. In fiscal 2024, these activities resulted in $27 million of charges primarily for acceleration of depreciation, write-off of property and equipment, and site move costs. In fiscal 2023, these activities resulted in $119 million of charges primarily for employee termination and the write-off of property and equipment, net of $65 million from reimbursement arrangements.

Activity and accrual balances for the 2023 Plan were as follows ($000):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Severance** | **Asset Write-Offs** | **Other** | **Total Accrual** |
| **Balance - June 30, 2023** | $64379 | $— | $— | $64379 |
| Restructuring charges (recoveries) | (129) | 11658 | 15527 | 27056 |
| Payments | (13189) |  |  | (13189) |
| Asset write-offs and other |  | (11658) | (15527) | (27185) |
| **Balance - June 30, 2024** | 51061 |  |  | 51061 |
| Restructuring charges | 6123 | 24010 | 22864 | 52997 |
| Payments | (12954) |  |  | (12954) |
| Asset write-offs and other |  | (24010) | (22864) | (46874) |
| **Balance - June 30, 2025** | $44230 | $— | $— | $44230 |

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At June 30, 2025, $11 million and $34 million of accrued severance related costs were included in other accrued liabilities and other liabilities on our Consolidated Balance Sheet, respectively, and are expected to result in cash expenditures through fiscal 2028. The current year severance related net charges are primarily comprised of accruals and adjustments for severance pay for employees being terminated due to the consolidation of certain manufacturing sites, with severance recorded in accordance with ASC 712. The fiscal 2024 severance related recoveries are primarily comprised of adjustments to accruals for severance pay for employees being terminated due to the consolidation of certain manufacturing sites, with severance recorded in accordance with ASC 712.

By segment in fiscal 2025, $45 million, $7 million and $1 million of restructuring costs were incurred in the Datacenter & Communications, Industrial and Corporate segments, respectively. By segment in fiscal 2024, $16 million, $10 million and $1 million of restructuring costs (recoveries) were incurred in the Datacenter & Communications, Industrial and Corporate segments, respectively. Restructuring charges and recoveries are recorded in Restructuring charges in our Consolidated Statements of Earnings (Loss).

**2025 Restructuring Plan**

Commencing in the quarter ended March 31, 2025, and as part of the ongoing strategic review of the Company's business, the Company's management approved the 2025 Plan. In connection therewith, the Company expects to incur charges for related severance and benefits, lease and contract termination costs, asset write-offs, facilities move and other restructuring costs. We evaluate restructuring charges in accordance with ASC 420 and ASC 712.

In fiscal 2025, these activities resulted in $107 million of charges primarily for the write-off of property and equipment and ROU assets, employee and contract termination costs. We expect the restructuring actions to be substantially completed by the end of fiscal 2026. However, the actual timing and costs associated with these restructuring actions may differ from our current expectations and estimates and such differences may be material.

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Activity and accrual balances for the 2025 Plan were as follows for fiscal 2025 ($000):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Severance** | **Asset Write-Offs** | **Other** | **Total Accrual** |
| Balance - June 30, 2024 | $— | $— | $— | $— |
| Restructuring charges | 23983 | 59068 | 24033 | 107084 |
| Payments | (7261) | (48574) | (4136) | (59971) |
| Balance - June 30, 2025 | $16722 | $10494 | $19897 | $47113 |

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At June 30, 2025, $17 million of accrued severance related costs were included in other accrued liabilities and are expected to result in cash expenditures primarily through fiscal 2026. The current year severance related net charges are primarily comprised of accruals for severance and pay for employees being terminated due to the consolidation of certain manufacturing sites as well as workforce reductions, with severance recorded in accordance with ASC 712. At June 30, 2025, total liabilities for asset write-offs and other contract costs of $19 million and $12 million were included in other accrued liabilities and other liabilities on our Consolidated Balance Sheet, respectively.

By segment, in fiscal 2025, $28 million, $72 million and $7 million of restructuring costs were incurred in the Datacenter & Communications, Industrial and Corporate segments, respectively. Restructuring charges and recoveries are recorded in Restructuring charges in our Consolidated Statements of Earnings (Loss).

**Note 21.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assets Held-for-Sale**

In the fourth quarter of fiscal 2025, management entered into non-binding agreements to sell several entities. As a result of classifying these entities as held-for-sale, we recorded non-cash impairment charges of $85 million in our Industrial segment to Impairment of assets held-for-sale in our Consolidated Statements of Earnings (Loss) in the fourth quarter of fiscal 2025 to reduce our carrying value in these entities to fair value. Current assets and current liabilities held for sale are recorded in Prepaid and other current assets and Other accrued liabilities, respectively, in our Consolidated Balance Sheet. Noncurrent assets and noncurrent liabilities held for sale are recorded in Other assets and Other liabilities, respectively, in our Consolidated Balance Sheet. Assets and liabilities held-for-sale are in our Industrial segment.

On August 2, 2025, we entered into an agreement to sell our aerospace and defense business for $400 million. We expect to close this transaction in the first quarter of fiscal 2026. Although the assets of this business were classified as held-for-sale at June 30, 2025, we did not record an impairment loss on this business as we expect to recognize a gain in the first quarter of fiscal 2026 when the sale of the business closes.

Current and noncurrent assets and liabilities classified as held for sale as of June 30, 2025 related to these entities are as follows ($000):

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| | |
|:---|:---|
| | **June 30, 2025** |
| Accounts receivable | $43353 |
| Inventories | 97236 |
| Prepaid and refundable income taxes | 9023 |
| Prepaid and other current assets | 3067 |
| &nbsp;&nbsp;Total current assets held-for-sale | $152679 |
| Property, plant & equipment, net | $103863 |
| Goodwill | 174373 |
| Intangible assets | 141647 |
| Other assets | 32 |
| Less: Impairment of assets held-for-sale | (84988) |
| &nbsp;&nbsp;Total noncurrent assets held-for-sale | $334927 |
| Accounts payable | $19209 |
| Accrued compensation and benefits | 16768 |
| Operating lease current liabilities | 2441 |
| Accrued income taxes payable | (226) |

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| | |
|:---|:---|
| Other accrued liabilities | 19202 |
| &nbsp;&nbsp;Total current liabilities held-for-sale | $57394 |
| Deferred income taxes | $14785 |
| Operating lease liabilities | 5980 |
| Other liabilities | 7870 |
| &nbsp;&nbsp;Total noncurrent liabilities held-for-sale | $28635 |

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**SCHEDULE II**

**COHERENT CORP. AND SUBSIDIARIES**

**VALUATION AND QUALIFYING ACCOUNTS**

**YEARS ENDED JUNE 30, 2025, 2024, AND 2023**

**(IN THOUSANDS OF DOLLARS)**

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Balance at<br>Beginning<br>of Year** | **Charged<br>to<br>Expense** | **Charged<br>to Other<br>Accounts** | **Charged<br>to Other<br>Accounts** | **Assets Held-For-Sale** | **Deduction<br>from<br>Reserves** | **Deduction<br>from<br>Reserves** | **Balance<br>at End<br>of Year** |
| **YEAR ENDED JUNE 30, 2025:** | | | | | | | | |
| Allowance for doubtful accounts | $9511 | $8181 | $— |  | $(117) | $(5386) | (3) | $12189 |
| Warranty reserves | $44193 | $26352 | $— |  | $(4299) | $(33492) |  | $32754 |
| Deferred tax asset valuation allowance | $154830 | $15413 | $3577 | (2) | $(10142) | $— |  | $163678 |
| **YEAR ENDED JUNE 30, 2024:** |  |  |  |  |  |  |  |  |
| Allowance for doubtful accounts | $8005 | $5161 | $— |  | $— | $(3655) | (3) | $9511 |
| Warranty reserves | $47563 | $34362 | $— |  | $— | $(37732) |  | $44193 |
| Deferred tax asset valuation allowance | $97180 | $57968 | $(318) | (2) | $— | $— |  | $154830 |
| **YEAR ENDED JUNE 30, 2023:** |  |  |  |  |  |  |  |  |
| Allowance for doubtful accounts | $4206 | $1793 | $3112 | (1) | $— | $(1106) | (3) | $8005 |
| Warranty reserves | $17738 | $40475 | $29196 | (1) | $— | $(39846) |  | $47563 |
| Deferred tax asset valuation allowance | $55420 | $4035 | $37725 | (12) | $— | $— |  | $97180 |

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<sup>(1)</sup> Related to amounts assumed from the Coherent, Inc. acquisition.

<sup>(2)</sup> Primarily related to currency translation adjustments.

<sup>(3)</sup> Primarily relates to write-offs of accounts receivable.