COHR's Focus on Silicon Carbide Substrates for Future Growth
2023-08-01
In a recent earnings call meeting, executives of COHR discussed the company's financial performance, future plans, expenses, capital expenditure, market differentiation, and the broader sensing category. The meeting provided valuable insights and allowed analysts to ask questions regarding these matters.
One of the most important topics discussed during the meeting was the company's backlog and its relation to the revenue guidance. This indicates the company's focus on managing its backlog effectively to achieve its revenue targets.
A particularly interesting highlight from the meeting was the company's emphasis on silicon carbide substrates and their potential impact on the market. CFO Mary Jane Raymond revealed that a significant portion of the company's capital expenditure is being allocated to silicon carbide, indicating its strategic importance for future growth.
During the meeting, Chairman and CEO Chuck Mattera emphasized the company's proprietary advantage in designing a process technology for growing substrates. He also highlighted their ability to scale production for both 150-millimeter and 200-millimeter substrates, showcasing the company's experience and expertise in this area.
Mattera further stressed the importance of capacity in meeting the market demand for silicon carbide substrates. This suggests that the company is actively working towards ensuring it can meet the growing demand for this product.
Overall, the company's focus on silicon carbide substrates and their significant investment in this area indicate their belief in its potential to drive future growth and success in the market.
Despite some challenges in the telecom sector due to supply chain constraints, the company remains optimistic about its market outlook. It aims to outpace market growth and achieve double-digit growth by 2024. The company is determined to maintain a gross margin of over 40% and is actively working towards resolving the issues in the telecom sector by the back half of 2023.
The company's key drivers of business include integration, share leadership, new applications and technologies, and the datacom business. It plans to expand its market share and maintain its position as a share leader. Additionally, the company intends to explore new designs, applications, markets, and technologies, particularly in 3D and optical sensing enabled by semiconductor lasers. It also aims to become a competitive player in the 800G solutions space, with a focus on supporting demand primarily from hyperscalers.
While the company did not provide specific guidance for the fiscal year '24 during the meeting, it expressed its determination to outpace market growth and its enthusiasm for the future. The company mentioned making the right investments and progressing well with new customers. It aspires to achieve double-digit growth into '24 but will provide an update on its outlook within the next 90 days.
In terms of capital spending plans, the company mentioned investing in capital equipment, paying off debt, and making significant investments in the silicon carbide platform. They are also executing a multiyear roadmap for the electrification of transportation and renewable energy infrastructure. The company's focus on sustainability is evident through the introduction of new products and technology innovations in various sectors.
The earnings call meeting included participation from analysts representing various financial institutions such as The Benchmark Company, William Blair and Company, Craig-Hallum Capital Group, Northland Securities, Cowen and Company, Bank of America Merrill Lynch, Morgan Stanley, Barclays, Stifel Financial Corp., and Rosenblatt Securities. Their presence indicates the level of interest and importance of the company being discussed.
In conclusion, COHR's earnings call meeting provided valuable insights into the company's financial performance, future plans, and market differentiation. The company's focus on silicon carbide substrates and its investment in this area suggest a belief in its potential for future growth. Despite challenges in the telecom sector, the company remains optimistic and determined to achieve its growth targets. With a diverse range of analysts participating in the meeting, it is clear that COHR's performance and outlook are of significant interest to the financial community.