Fabrinet Announces First Quarter Fiscal Year 2026 Financial Results

November 03, 2025 16:15 ET | Source: Fabrinet Record First Quarter Revenue and Earnings Per Share Above Guidance Ranges BANGKOK, Nov. 03, 2025 (GLOBE NEWSWIRE) -- Fabrinet (NYSE: FN), a leading provider of advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, today announced its financial results for its first fiscal quarter ended September 26, 2025. Seamus Grady, Chairman and Chief Executive Officer of Fabrinet, said, “We had an outstanding first quarter with revenue of $978 million dollars, which was above our guidance range. This record result was driven by another strong telecom performance, an early contribution from new High-Performance Computing revenue, and a smaller than anticipated sequential decline in datacom revenue. With continued strong execution, our revenue upside flowed directly to the bottom line, resulting in record earnings per share that also exceeded our guidance. With multiple tailwinds, we are optimistic that we will see our growth further accelerate in the second quarter.” First Quarter Fiscal Year 2026 Financial Highlights GAAP Results Revenue for the first quarter of fiscal year 2026 was $978.1 million, compared to $804.2 million for the first quarter of fiscal year 2025.GAAP net income for the first quarter of fiscal year 2026 was $95.9 million, compared to $77.4 million for the first quarter of fiscal year 2025.GAAP net income per diluted share for the first quarter of fiscal year 2026 was $2.66, compared to $2.13 for the first quarter of fiscal year 2025. Non-GAAP Results Non-GAAP net income for the first quarter of fiscal year 2026 was $105.3 million, compared to $86.9 million for the first quarter of fiscal year 2025.Non-GAAP net income per diluted share for the first quarter of fiscal year 2026 was $2.92, compared to $2.39 for the first quarter of fiscal year 2025. Business Outlook Based on information available as of November 3, 2025, Fabrinet is issuing guidance for its second fiscal quarter ending December 26, 2025, as follows: Fabrinet expects second quarter revenue to be in the range of $1.05 billion to $1.10 billion.GAAP net income per diluted share is expected to be in the range of $2.91 to $3.06, based on approximately 36.2 million fully diluted shares outstanding.Non-GAAP net income per diluted share is expected to be in the range of $3.15 to $3.30, based on approximately 36.2 million fully diluted shares outstanding. Guidance for non-GAAP net income per diluted share excludes share-based compensation expenses and certain non-recurring items. A reconciliation of non-GAAP net income per diluted share to the corresponding GAAP measure is available at the end of this press release. Conference Call Information What: Fabrinet First Quarter Fiscal Year 2026 Financial Results CallWhen: November 3, 2025Time: 5:00 p.m. ETLive Call and Replay: https://investor.fabrinet.com/events-and-presentations/events A recorded version of this webcast will be available approximately two hours after the call and accessible at http://investor.fabrinet.com. The webcast will be archived on Fabrinet’s website for a period of one year. About Fabrinet Fabrinet is a leading provider of advanced optical packaging and precision optical, electro-mechanical, and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and subsystems, automotive components, medical devices, industrial lasers and sensors. Fabrinet offers a broad range of advanced optical and electro-mechanical capabilities across the entire manufacturing process, including process design and engineering, supply chain management, manufacturing, advanced packaging, integration, final assembly and testing. Fabrinet focuses on production of high complexity products in any mix and any volume. Fabrinet maintains engineering and manufacturing resources and facilities in Thailand, the United States of America, the People’s Republic of China, and Israel. For more information visit: www.fabrinet.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include: (1) our optimism and confidence in our ability to deliver strong execution in the second fiscal quarter; and (2) all of the statements under the “Business Outlook” section regarding our expected revenue, GAAP and non-GAAP net income per share, and fully diluted shares outstanding for the second quarter of fiscal year 2026. These forward-looking statements involve risks and uncertainties, and actual results could vary materially from these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: changes in general economic conditions, either globally or in our markets, and the risk of recession or an economic downturn; disruption to our supply chain, which could increase our costs and affect our ability to procure parts and materials; less customer demand for our products and services than forecasted; less growth in the optical communications, automotive, industrial lasers and sensors markets than we forecast; difficulties expanding into additional markets, such as the semiconductor processing, biotechnology, metrology and materials processing markets; increased competition in the optical manufacturing services markets; difficulties in delivering products and services that compete effectively from a price and performance perspective; our reliance on a small number of customers and suppliers; difficulties in managing our operating costs; difficulties in managing and operating our business across multiple countries (including Thailand, the People’s Republic of China, Israel and the U.S.); and other important factors as described in reports and documents we file from time to time with the Securities and Exchange Commission (SEC), including the factors described under the section captioned “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on August 19, 2025. We disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise. Non-GAAP Financial Measures In addition to reporting financial results in accordance with GAAP, we provide investors with certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. We believe these non-GAAP financial measures provide investors with useful supplemental information to: (1) measure company performance against historical results, (2) facilitate comparisons to our competitors’ operating results, and (3) allow greater transparency with respect to information used by management in making financial and operational decisions. In addition, we use some of these non-GAAP financial measures to measure company performance for the purposes of determining employee incentive plan compensation. Non-GAAP gross profit, non-GAAP operating profit, non-GAAP net income and non-GAAP net income per diluted share exclude: share-based compensation expenses; severance payment and others; restructuring and other related costs; and legal and litigation costs. We have excluded these items in order to enhance investors’ understanding of our underlying operations. Non-GAAP free cash flow is net cash provided by (used in) operating activities, minus capital expenditures (purchase of property, plant and equipment). We use free cash flow to measure our ability to generate additional cash from our business operations. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. We urge you to review the reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business. Investor Contact:Garo Toomajanianir@fabrinet.com FABRINETCONSOLIDATED BALANCE SHEETS (in thousands of U.S. dollars, except share data and par value)September 26, 2025 June 27, 2025 (unaudited) Assets Current assets Cash and cash equivalents$305,001 $306,425 Short-term investments 663,771 627,819 Trade accounts receivable, net of allowance for expected credit losses of $1,299 and $1,344, respectively 706,935 758,894 Inventories 722,194 581,015 Prepaid expenses 36,548 38,476 Other current assets 124,512 116,210 Total current assets 2,558,961 2,428,839 Non-current assets Property, plant and equipment, net 419,481 380,640 Intangibles, net 2,111 2,156 Operating right-of-use assets 5,263 5,768 Deferred tax assets 13,790 13,406 Other non-current assets 9,157 623 Total non-current assets 449,802 402,593 Total Assets$3,008,763 $2,831,432 Liabilities and Shareholders’ Equity Current liabilities Trade accounts payable 695,552 637,417 Fixed assets payable 50,941 40,781 Operating lease liabilities, current portion 1,860 1,792 Income tax payable 10,932 7,939 Accrued payroll, bonus and related expenses 26,298 24,566 Accrued expenses 28,952 30,630 Severance liabilities, current portion 2,019 — Other payables 88,979 66,717 Total current liabilities 905,533 809,842 Non-current liabilities Deferred tax liability 1,710 1,595 Operating lease liability, non-current portion 3,304 3,679 Severance liabilities 30,330 31,225 Other non-current liabilities 6,718 3,279 Total non-current liabilities 42,062 39,778 Total Liabilities 947,595 849,620 Shareholders’ equity Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of September 26, 2025 and June 27, 2025) — — Ordinary shares (500,000,000 shares authorized, $0.01 par value; 39,701,363 shares and 39,602,152 shares issued as of September 26, 2025 and June 27, 2025, respectively; and 35,826,315 shares and 35,728,074 shares outstanding as of September 26, 2025 and June 27, 2025, respectively) 397 396 Additional paid-in capital 224,540 237,881 Less: Treasury shares (3,875,048 shares and 3,874,078 shares as of September 26, 2025 and June 27, 2025, respectively) (360,324) (360,056)Accumulated other comprehensive income (loss) 7,332 10,294 Retained earnings 2,189,223 2,093,297 Total Shareholders’ Equity 2,061,168 1,981,812 Total Liabilities and Shareholders’ Equity$3,008,763 $2,831,432 FABRINETCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended(in thousands of U.S. dollars, except per share data)September 26, 2025 September 27, 2024Revenues$978,128 $804,228 Cost of revenues (861,689) (705,202)Gross profit 116,439 99,026 Selling, general and administrative expenses (22,246) (22,031)Restructuring and other related costs — (57)Operating income 94,193 76,938 Interest income 9,417 10,933 Foreign exchange gain (loss), net (2,060) (7,095)Other income (expense), net (122) (19)Income before income taxes 101,428 80,757 Income tax expense (5,502) (3,363)Net income 95,926 77,394 Other comprehensive income (loss), net of tax: Change in net unrealized gain (loss) on available-for-sale securities (811) 6,818 Change in net unrealized gain (loss) on derivative instruments (2,062) 8,533 Change in foreign currency translation adjustment (89) (352)Total other comprehensive income (loss), net of tax (2,962) 14,999 Net comprehensive income$92,964 $92,393 Earnings per share Basic$2.68 $2.14 Diluted$2.66 $2.13 Weighted-average number of ordinary shares outstanding (in thousands of shares) Basic 35,773 36,203 Diluted 36,097 36,408 FABRINETCONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended(in thousands of U.S. dollars)September 26, 2025 September 27, 2024Cash flows from operating activities Net income for the period$95,926 $77,394 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 14,860 12,752 (Gain) loss on disposal of property, plant and equipment and intangibles (6) 10 Amortization of discount (premium) of short-term investments (1,222) (1,087)Inventory obsolescence impairment 2,290 — (Reversal of) allowance for expected credit losses (45) 325 Unrealized loss (gain) on exchange rate and fair value of foreign currency forward contracts 461 6,204 Share-based compensation 9,071 8,682 Customer warrant 286 — Deferred income tax expense (benefit) (106) (2,721)Other non-cash expenses 66 9 Changes in operating assets and liabilities Trade accounts receivable 51,821 (69,396)Inventories (143,469) 22,801 Other current assets and non-current assets (13,579) 1,205 Trade accounts payable 59,508 (17,412)Income tax payable 2,993 467 Accrued expenses (2,539) 21,902 Other payables 23,284 18,236 Severance liabilities 826 639 Other current liabilities and non-current liabilities 2,142 3,172 Net cash provided by operating activities 102,568 83,182 Cash flows from investing activities Purchase of short-term investments (110,329) (95,572)Proceeds from maturities of short-term investments 74,789 43,914 Purchase of property, plant and equipment (45,266) (20,250)Purchase of intangibles (169) (122)Proceeds from disposal of property, plant and equipment 15 36 Net cash used in investing activities (80,960) (71,994)Cash flows from financing activities Repurchase of ordinary shares (268) — Withholding tax related to net share settlement of restricted share units (22,697) (20,220)Net cash used in financing activities (22,965) (20,220)Net increase (decrease) in cash and cash equivalents$(1,357) $(9,032)Movement in cash and cash equivalents Cash and cash equivalents at the beginning of period$306,425 $409,973 Increase (decrease) in cash and cash equivalents (1,357) (9,032)Effect of exchange rate on cash and cash equivalents (67) (257)Cash and cash equivalents at the end of period$305,001 $400,684 Non-cash investing and financing activities Construction, software and equipment-related payables$50,941 $10,166 FABRINETRECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (UNAUDITED)Reconciliation of GAAP Gross Profit and GAAP Gross Margin to Non-GAAP Gross Profit and Non-GAAP Gross Margin Three Months Ended (in thousands of U.S. dollars)September 26, 2025 September 27, 2024Revenues$978,128 $804,228 Gross profit (GAAP)$116,439 11.9 % $99,026 12.3 %Share-based compensation expenses 3,519 2,898 Gross profit (Non-GAAP)$119,958 12.3 % $101,924 12.7 % Reconciliation of GAAP Operating Profit and GAAP Operating Margin to Non-GAAP Operating Profit and Non-GAAP Operating Margin Three Months Ended (in thousands of U.S. dollars)September 26, 2025 September 27, 2024Revenues$978,128 $804,228 Operating profit (GAAP)$94,193 9.6 % $76,938 9.6 %Share-based compensation expenses 9,071 8,682 Legal and litigation costs 256 — Severance payment and others 72 730 Restructuring and other related costs — 57 Operating profit (Non-GAAP)$103,592 10.6 % $86,407 10.7 % FABRINETRECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (UNAUDITED)Reconciliation of GAAP Net Income and EPS to Non-GAAP Net Income and EPS Three Months Ended September 26, 2025 September 27, 2024(in thousands of U.S. dollars, except per share data)Net income Diluted EPS Net income Diluted EPSGAAP measures$95,926 $2.66 $77,394 $2.13 Items reconciling GAAP net income & EPS to non-GAAP net income & EPS: Related to cost of revenues: Share-based compensation expenses 3,519 0.10 2,898 0.08 Total related to cost of revenues 3,519 0.10 2,898 0.08 Related to selling, general and administrative expenses: Share-based compensation expenses 5,552 0.15 5,784 0.16 Legal and litigation costs 256 0.01 — — Severance payment and others 72 0.00 730 0.02 Total related to selling, general and administrative expenses 5,880 0.16 6,514 0.18 Related to other income and expense: Restructuring and other related costs — — 57 0.00 Total related to other income and expense — — 57 0.00 Total related to net income & EPS 9,399 0.26 9,469 0.26 Non-GAAP measures$105,325 $2.92 $86,863 $2.39 Shares used in computing diluted net income per share (in thousands of shares) GAAP diluted shares 36,097 36,408 Non-GAAP diluted shares 36,097 36,408 FABRINETRECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (UNAUDITED) (in thousands of U.S. dollars)Three Months Ended September 26, 2025 September 27,2024Net cash provided by operating activities$102,568 $83,182 Less: Purchase of property, plant and equipment (45,266) (20,250)Non-GAAP free cash flow$57,302 $62,932 FABRINETGUIDANCE FOR QUARTER ENDING DECEMBER 26, 2025RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES DilutedEPSGAAP net income per diluted share$2.91 to $3.06Related to cost of revenues: Share-based compensation expenses0.08Total related to cost of revenues0.08Related to selling, general and administrative expenses: Share-based compensation expenses0.16Total related to selling, general and administrative expenses0.16Total related to net income & EPS0.24Non-GAAP net income per diluted share$3.15 to $3.30

Fabrinet Announces First Quarter Fiscal Year 2026 Financial Results

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