Fabrinet Q1 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Fabrinet Q1 FY2026 Earnings Summary (Ended September 26, 2025)

  • Key Highlights: Record revenue of $978 million (+22% YoY from Q1 FY2025, +8% QoQ from Q4 FY2025). Non-GAAP EPS of $2.92 (record, including $0.06 FX loss). Strong momentum across telecom/DCI and new HPC category; optimistic outlook for Q2 with multiple growth drivers.
  • Guidance: Q2 FY2026 revenue $1.05B-$1.1B (+29% YoY at midpoint); non-GAAP EPS $3.15-$3.30. Revenue expected up sequentially in most markets (flat to down in automotive); HPC ramp highlighted as significant.

Revenue Breakdown by Segment

  • Optical Communications: $747M total (+19% YoY, +8% QoQ). Telecom: $412M record (+59% YoY, +15% QoQ), driven by DCI. DCI: $138M (+92% YoY, +29% QoQ, 14% of total revenue). Datacom: $273M (-17% YoY, -1% QoQ; smaller decline than expected).
  • Non-Optical Communications: $231M (+30% YoY, +5% QoQ). Includes new HPC category: $15M (first program qualified/ramped; expected to scale significantly). Automotive: $122M (+19% YoY, -5% QoQ). Industrial lasers: $40M (+12% YoY, flat QoQ).

Profitability & Balance Sheet

  • Non-GAAP gross margin: 12.3% (-30 bps QoQ; FX and merit increase headwinds offset by operating leverage).
  • Operating margin: 10.6% (-10 bps QoQ). Operating expenses: $16M (1.7% of revenue).
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Operator: Good afternoon. Welcome to Fabrinet's Financial Results Conference Call for the First Quarter of Fiscal Year 2026. [Operator Instructions] As a reminder, today's call is being recorded. I would now like to turn the call over to your host, Garo Toomajanian, VP of Investor Relations. Garo Toomajanian: Thank you, operator, and good afternoon, everyone. Thank you for joining us on today's conference call to discuss Fabrinet's financial and operating results for the first quarter of fiscal year 2026, which ended September 26, 2025. With me on the call today are Seamus Grady, Chairman and Chief Executive Officer; and Csaba Sverha, Chief Financial Officer. This call is being webcast, and a replay will be available on the Investors section of our website located at investor.fabrinet.com. During this call, we will present both GAAP and non-GAAP financial measures. Please refer to the Investors section of our website for important information, including our earnings press release and investor presentation, which include our GAAP to non-GAAP reconciliation as well as additional details of our revenue breakdown. In addition, today's discussion will contain forward-looking statements about the future financial performance of the company. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from management's current expectations. These statements reflect our opinions only as of the date of this presentation and we
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