Fabrinet

Fourth-quarter revenue was a record $1.316 billion, up 45% year over year, and non-GAAP EPS was $4.10. Full-year fiscal 26 revenue was $4.6 billion, up 36% year over year, and full-year non-GAAP EPS was $14.09, up 39%. Q4 non-GAAP gross margin was 12.2%, up 10 basis points sequentially and down 30 basis points year over year; operating margin was 10.9%. Segment revenue in Q4 was $669 million for data center (+68% YoY, +13% QoQ), $413 million for communications infrastructure (+40% YoY, +1% QoQ), and $234 million for automotive, industrial, and other (+8% YoY, +9% QoQ). For Q1 fiscal 27, management guided revenue to $1.375 billion-$1.425 billion, implying 43% year-over-year growth at the midpoint, and EPS to $4.10-$4.25.

Seamus Grady described the quarter as outstanding and emphasized that growth is broad-based rather than dependent on one product or customer. He repeatedly highlighted strong demand across data center, communications infrastructure, and emerging opportunities like NPO, CPO, OCS, and multi-rail architectures, calling them areas where Fabrinet is well positioned because of its manufacturing complexity and packaging expertise. His tone was notably confident and expansive, especially on fiscal 27 and beyond, though he kept some customer-specific details off-limits.

Csaba Sverha said Q4 revenue reached a record $1.316 billion and non-GAAP EPS was a record $4.10, with gross margin at 12.2% and operating expenses at just 1.3% of revenue. He noted GAAP net income of $139 million, or $3.83 per diluted share, and non-GAAP net income of $149 million, or $4.10 per diluted share. Cash and short-term investments ended the quarter at $876 million, down $70 million from Q3, with operating cash flow of $55 million, capex of $92 million, and free cash flow of negative $37 million; for the full year, operating cash flow was $257 million and free cash flow was $4 million. He also said the share repurchase program had about $169 million remaining under authorization.

Analysts focused on Datacom softness, component supply, and the timing of the next transceiver ramp, and management replied that the category should improve sequentially in Q1 and that demand remains robust. Questions also centered on capacity and whether a new factory trigger was approaching; Seamus responded that Fabrinet is expanding ahead of demand and now sees land and plans that could take revenue capacity from about a $5.3 billion run rate to between $12.5 billion and $14 billion over time. Other notable questions covered NPO/CPO opportunities, Nokia/Infinera dynamics, DCI scale-out/scale-across, and OCS; management said NPO looks nearer term than CPO, Nokia is becoming a bigger relationship, and OCS is still small but could become more meaningful.