Coherent COHR · USD

Segment and Geographic ReportingOur Chief Executive Officer has been identified as the chief operating decision maker (“CODM”) as he utilizes financial information to make decisions about allocating resources and assessing performance for the entire Company, which is used in the decision-making process to assess performance. We determine our reportable business segments based on the way the CODM organizes business segments within the Company for making operating decisions and assessing performance. Effective July 1, 2022, we report our financial results in the following three segments: (i) Networking, (ii) Materials, and (iii) Lasers. The Networking segment has locations in the United States, Australia, China, Germany, Malaysia, South Korea, Thailand, the Philippines, the United Kingdom, and Vietnam. This segment address all of Coherent’s four end markets, namely: communications, industrial, electronics, and instrumentation, with a concentration in the communications market. This segment leverages Coherent’s compound semiconductor technology platforms and deep knowledge of end-user applications for our key end markets to deliver differentiated components, modules and subsystems.The Materials segment has locations in the United States, China, Germany, Italy, Japan, Singapore, South Korea, Sweden, Switzerland, Taiwan, the Philippines, the United Kingdom, and Vietnam. This segment address all of Coherent’s four end markets, namely: communications, industrial, electronics, and instrumentation, with concentrations in the industrial and electronics markets. The Materials segment is a market leader in engineered materials and optoelectronic devices, such as those based on ZnSe, ZnS, GaAs, InP, GaSb, and SiC. The Lasers segment has locations in the United States, Finland, Germany, Malaysia, Singapore, South Korea, Spain, Sweden, Switzerland, and the United Kingdom. The Lasers segment’s lasers and optics products serve industrial customers in both semiconductor and display capital equipment, precision manufacturing, and instrumentation customers in life sciences and scientific instrumentation.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 CODM implemented changes in the measure he uses to allocate resources and assess performance.

Revenue from Contracts with CustomersThe following table summarizes disaggregated revenue by market ($000):Year Ended June 30, 2025NetworkingMaterialsLasersTotalIndustrial$61,971 $516,768 $1,129,046 $1,707,785 Communications3,320,780 115,260 — 3,436,040 Electronics8,185 278,181 20 286,386 Instrumentation30,340 43,634 305,930 379,904 Total Revenues$3,421,276 $953,843 $1,434,996 $5,810,115 Year Ended June 30, 2024NetworkingMaterialsLasersTotalIndustrial$63,905 $546,003 $1,070,268 $1,680,176 Communications2,192,286 81,475 — 2,273,761 Electronics6,655 349,250 — 355,905 Instrumentation32,883 39,845 325,118 397,846 Total Revenues$2,295,729 $1,016,573 $1,395,386 $4,707,688 Year Ended June 30, 2023NetworkingMaterialsLasersTotalIndustrial$70,076 $603,664 $1,087,881 $1,761,621 Communications2,219,677 73,703 — 2,293,380 Electronics11,488 614,151 — 625,639 Instrumentation39,689 58,240 381,531 479,460 Total Revenues$2,340,930 $1,349,758 $1,469,412 $5,160,100 Contract LiabilitiesPayments 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.

Commitments and ContingenciesWe 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.

DebtThe components of debt as of the dates indicated were as follows ($000):June 30, 2025June 30, 2024Term A Facility, interest at adjusted SOFR, as defined, plus 1.850%$624,375 $775,625 Debt issuance costs, Term A Facility and Revolving Credit Facility(8,141)(13,586)Term B Facility, interest at adjusted SOFR, as defined, plus 2.00%2,102,358 2,384,536 Debt issuance costs, Term B Facility(36,478)(49,835)5.00% Senior Notes990,000 990,000 Debt Issuance costs, Senior Notes(4,966)(5,939)1.3% Term loan — 335 Facility construction loan in Germany 17,682 19,082 Borrowings on local lines of credit2,091 — Total debt3,686,921 4,100,218 Current portion of long-term debt(188,306)(73,770)Long-term debt, less current portion$3,498,615 $4,026,448 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):Year EndingJune 30,2026$188,306 202716,652 2028614,152 20293,215 20302,912,573 Thereafter1,608 Total$3,736,506 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.

Income TaxesThe components of earnings (loss) before income taxes by jurisdiction were as follows ($000):Year Ended June 30,202520242023U.S. loss$(445,586)$(540,048)$(450,370)Non-U.S. income539,767 392,401 94,812 Earnings (loss) before income taxes$94,181 $(147,647)$(355,558)The components of the income tax expense (benefit) were as follows ($000):Year Ended June 30,202520242023Current:Federal$3,010 $10,119 $5 State1,733 181 3,867 Foreign154,815 103,640 106,850 Total Current159,558 113,940 110,722 Deferred:Federal(50,454)(68,955)(106,044)State(7,217)(186)(7,151)Foreign(37,763)(33,682)(93,627)Total Deferred(95,434)(102,823)(206,822)Total Income Tax Expense (Benefit)$64,124 $11,117 $(96,100)Principal items comprising deferred tax assets and liabilities were as follows ($000):June 30,20252024Deferred income tax assetsInventory capitalization$74,886 $62,242 Non-deductible accruals18,222 16,770 Accrued employee benefits36,331 38,460 Net-operating loss and credit carryforwards256,794 268,735 Share-based compensation expense15,852 15,947 Other9,564 1,346 Research and development capitalization168,998 128,291 Deferred revenue15,376 14,839 Right of use asset37,785 47,712 Valuation allowances(163,678)(154,830)Total deferred income tax assets470,130 439,512 Deferred income tax liabilitiesTax over book accumulated depreciation(14,038)(29,065)Intangible assets(863,484)(905,435)Interest rate swap— (4,104)Interest rate cap(4,000)(11,465)Tax on unremitted earnings(63,383)(61,719)Outside basis differences(142,781)(122,423)Lease liability(31,239)(46,198)Other(9,515)(2,511)Total deferred income tax liabilities(1,128,440)(1,182,920)Net deferred income taxes$(658,310)$(743,408)The reconciliation of income tax expense at the statutory U.S. federal rate to the reported income tax expense (benefit) is as follows ($000):Year Ended June 30,2025%2024%2023%Taxes at statutory rate$19,778 21 $(31,006)21 $(74,667)21 Increase (decrease) in taxes resulting from:State income taxes-net of federal benefit(4,265)(5)(22)— (2,548)1 Taxes on non U.S. earnings3,632 4 16,601 (11)191 — Valuation allowance20,295 22 43,866 (30)3,836 (1)U.S.

Share-Based CompensationThe 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.

LeasesThe 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 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.

We have established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats and have integrated these processes into our overall risk management systems and processes. We have aligned our cybersecurity program with recognized security frameworks such as NIST-CSF (National Institute of Standard and Technologies – Cybersecurity Framework). We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.We maintain a risk based approach to identify cybersecurity threats, and conduct assessments to determine if our information systems are vulnerable to such cybersecurity threats. This includes identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.We maintain reasonable safeguards to minimize identified risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards. We devote significant resources and designate high-level personnel, including our Chief Information Officer and Global Head of Cybersecurity, to manage the risk mitigation process.We have implemented technical solutions that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality, and access controls. We regularly evaluate, monitor, and improve these solutions. As part of our overall risk management system, we monitor and test our safeguards and train our employees on these safeguards, in collaboration with human resources, information technology, legal, compliance and ethics and management. Personnel at all levels and departments are made aware of our cybersecurity policies through periodic trainings.We periodically engage consultants, auditors, or other third parties. These service providers assist us to design, implement or assess our cybersecurity policies and procedures, as well as to monitor and test our safeguards.