Financial Trends -- 9/10
Firing on essentially every cylinder the rubric rewards. GAAP revenue YoY reaccelerated from +16%
to a durable low-20s, core sales growth accelerated into the high-teens/low-20s on the AI/data-center
optical ramp, and both gross and operating margins expanded materially off 2024 troughs (core
operating margin +470bps to 20.2%; GAAP operating income +101% in FY25 on +19% revenue -- textbook
operating leverage). FCF positive and growing on a full-year basis (FY25 ~$1.41B, +45%). A 9 not a
10 on two counts: share count is flat-to-slightly-diluting rather than shrinking, and FCF is lumpy
with structurally weak first quarters plus a rising capex curve. No penalty modifiers trigger.
Weight: 25%
Quarterly GAAP Net Sales ($M) -- 9 Quarters
| Metric | Q1'24 | Q2'24 | Q3'24 | Q4'24 | Q1'25 | Q2'25 | Q3'25 | Q4'25 | Q1'26 |
|---|---|---|---|---|---|---|---|---|---|
| GAAP Net Sales | $2,975M | $3,251M | $3,391M | $3,501M | $3,452M | $3,862M | $4,100M | $4,215M | $4,144M |
| YoY | — | — | — | — | +16.0% | +18.8% | +20.9% | +20.4% | +20.0% |
| Optical Segment | $930M | $1,113M | $1,246M | $1,368M | $1,355M | $1,566M | $1,652M | $1,701M | $1,846M |
| Optical YoY | — | — | — | — | +45.7% | +40.7% | +32.6% | +24.3% | +36.2% |
| Core Op Margin % | 15.5% | 17.4% | 18.3% | 18.5% | 18.0% | 19.0% | 19.6% | 20.2% | 20.2% |
| Core EPS ($) | $0.38 | $0.47 | $0.54 | $0.57 | $0.54 | $0.60 | $0.67 | $0.72 | $0.70 |
Revenue reaccelerated to a durable low-20s: +16.0% (Q1'25) to +20.0% (Q1'26).
GAAP revenue YoY climbed ~500bps through mid-2025 and is now high and stable in the low-20s
-- not decelerating. Core sales YoY accelerated (+8.2% to +18.1%) as the AI/data-center optical
mix took hold under the Springboard plan. Optical YoY is still 30%+ but decelerating off a very
high base (45.7% to 36.2%) -- math, not weakness, with absolute dollars at a record
$1,846M.
Core EPS YoY has run a consistent 24-42%, outpacing revenue on operating leverage.
Margin Trajectory (bps off trough)
Broad-based, multi-quarter margin expansion well above the "expanding" threshold.
Core operating margin troughed at 15.5% (Q1'24) and reached
20.2%
(Q1'26) = +470bps. GAAP operating margin expanded +690bps off trough; core gross
margin +230bps off trough to
39.1%.
Drivers: favorable optical/AI mix, Springboard productivity, and pricing.
Annual Financial Summary (FY ends December)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| GAAP Net Sales ($M) | $14,082M | $14,189M | $12,588M | $13,118M | $15,629M |
| Rev YoY | — | +0.8% | -11.3% | +4.1% | +19.1% |
| Optical ($M) | $4,349M | $5,023M | $4,012M | $4,657M | $6,274M |
| GAAP Op Income ($M) | $2,112M | $1,438M | $890M | $1,135M | $2,279M |
| Core Op Margin % | 17.4% | 16.8% | 16.5% | 17.5% | 19.3% |
| Core EPS ($) | $2.07 | $2.09 | $1.70 | $1.96 | $2.52 |
| Operating CF ($M) | $3,412M | $2,615M | $2,005M | $1,939M | $2,695M |
| Capex ($M) | ($1,637M) | ($1,604M) | ($1,390M) | ($965M) | ($1,282M) |
| Free Cash Flow ($M) | $1,775M | $1,011M | $615M | $974M | $1,413M |
| FCF YoY | — | -43.0% | -39.2% | +58.4% | +45.1% |
| Shares Out (M) | 845.8 | 846.6 | 853.5 | 856.6 | 857.9 |
Key trends
- Revenue reaccelerating: From $14.1B (2021) through a $12.6B trough (2023) to $15.6B (2025, +19.1%), now running a durable +20% YoY in Q1'26 on the AI/data-center optical ramp
- Operating leverage: GAAP operating income compounded from an $890M trough (2023) to $2,279M (2025), +101% in FY25 on +19% revenue
- Margin expansion: Core operating margin +470bps off its Q1'24 trough to 20.2%; the 20% Springboard target was hit a full year early
- FCF growing: FY25 FCF ~$1.41B (+45%) on operating cash flow +39%; lumpy and Q1-seasonal, with capex ramping to fund AI-optical capacity
- Share count: Flat-to-slightly-diluting (+0.5% YoY) -- no buyback tailwind to per-share growth, the one clear rubric shortfall
Segment Mix -- Q1 2026 Core Sales
Within Optical, the AI engine is Enterprise: $962M (+36% vs $705M); Carrier $884M (+36% vs $650M).
Free Cash Flow ($M, Quarterly)
FCF is positive and growing annually but lumpy and Q1-seasonal.
First quarters are structurally weak (Q1'25 -$57M, Q1'26 only +$30M), and capex is now ramping
(+60% YoY in Q1'26) to fund hyperscale optical capacity. On a full-year/TTM basis FCF is clearly
positive and growing (FY25 ~$1.41B, +45%; OCF +39%). This is the reason the score is a 9 not a
10 -- worth monitoring, but not yet a free-cash-flow red flag.
Score Rationale
Score of 9/10. Rubric-10 needs revenue accelerating + margins +100bps + share count declining + FCF YoY accelerating. GLW hits three cleanly and falls short on one.
Supports the 9:
- GAAP revenue YoY reaccelerated to a durable low-20s; core sales growth accelerated into the high-teens on the AI/optical ramp
- Margins expanded +230-690bps off trough (core operating margin +470bps to 20.2%)
- GAAP operating income +101% in FY25 on +19% revenue -- textbook operating leverage
- FCF positive and growing (+45% FY25; OCF +39%); operating income compounding faster than revenue
Why not a 10 (no penalty modifiers triggered):
- Share count is flat-to-slightly-diluting (+0.5% YoY), not shrinking -- no buyback tailwind. Dilution below 10%, so no penalty
- FCF is lumpy and Q1-seasonal with a rising capex curve -- but TTM/annual FCF is positive (no penalty), and total debt grew ~11% in FY25 vs +19% revenue (slower than revenue, no debt-outpacing penalty)
Composite quality gate -- positive & growing FCF: YES. FCF positive and growing on a full-year basis; TTM through Q1'26 supports the trend.
Data sourced from Daloopa (company_id: 85). Fiscal year ends December 31. FCF = GAAP operating cash flow − capex. All financials in USD.