Coherent Inc (COHR)
Interest coverage
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 424,149 | 472,464 | 360,779 | 198,412 | 97,426 | 89,982 | 123,535 | 101,466 | 158,981 | 215,595 | 254,735 | 344,711 | 404,867 | 414,699 | 414,684 | 438,330 | 412,489 | 371,404 | 326,759 | 125,826 |
| Interest expense (ttm) | US$ in thousands | 243,206 | 255,992 | 271,461 | 281,861 | 288,475 | 299,585 | 302,015 | 298,241 | 286,872 | 256,478 | 224,794 | 170,952 | 121,254 | 86,818 | 56,353 | 54,876 | 59,899 | 71,354 | 86,850 | 99,655 |
| Interest coverage | 1.74 | 1.85 | 1.33 | 0.70 | 0.34 | 0.30 | 0.41 | 0.34 | 0.55 | 0.84 | 1.13 | 2.02 | 3.34 | 4.78 | 7.36 | 7.99 | 6.89 | 5.21 | 3.76 | 1.26 |
June 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $424,149K ÷ $243,206K
= 1.74
The interest coverage ratio of Coherent Inc. exhibits significant fluctuations over the reported period, indicating changing capacity to meet interest obligations with earnings before interest and taxes (EBIT). At the beginning of the observed timeframe, on September 30, 2020, the ratio was notably low at 1.26, suggesting limited ability to cover interest expenses and potential financial stress.
Throughout 2020 and into early 2021, there was a marked improvement, with ratios rising to a peak of 7.99 on September 30, 2021. This substantial increase reflects a strengthening in earnings relative to interest obligations, implying healthier financial conditions and greater safety margin for interest payments.
Subsequently, a downward trend emerges from late 2021 onwards, with the ratio declining sharply from 7.36 at the end of December 2021 to 0.34 by September 30, 2023. This persistent decline indicates progressive deterioration in the company’s ability to generate sufficient EBIT to cover interest expenses, raising concerns about increasing leverage and potential difficulty in servicing debt.
From September 30, 2023, there is a slight reversal in the trend, with ratios gradually increasing towards 1.85 at the end of March 2025. This upward movement may suggest some improvement in earnings power concerning interest coverage, although the ratio remains relatively low compared to earlier peaks, reflecting ongoing financial pressures.
Overall, the trajectory of the interest coverage ratio reveals a period of initial strengthening followed by a substantial weakening over recent years, ending with a modest recovery. This pattern highlights the importance of monitoring earnings stability and debt management strategies moving forward.
Peer comparison
Jun 30, 2025