Fabrinet Q2 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Period: Quarter ended December 26, 2025 (Q2 FY2026). Record results driven by strong demand across optical communications and high-performance computing (HPC).

Key Financial Highlights

  • Revenue: $1.13 billion (new record) — +36% YoY, +16% QoQ. Fastest YoY growth since IPO.
  • Non-GAAP EPS: $3.36 (new record) — exceeded guidance; included $0.09 per share FX revaluation loss.
  • Gross Margin: 12.4% (+10 bps QoQ, flat YoY) despite FX headwinds.
  • Operating Margin: 10.9% (+30 bps QoQ and YoY) due to operating leverage.
  • Net Income: $122 million.
  • Cash & Short-term Investments: $961 million (down $7M QoQ).
  • Operating Cash Flow: $46 million; Free Cash Flow: -$5 million (due to CapEx).
  • Share Repurchases: ~12,000 shares at avg. $387/share ($5M total); $169M remaining authorization.

Revenue by Segment

  • Optical Communications: $833 million (+29% YoY, +11% QoQ)
    • Telecom: $554 million (record) — +59% YoY, +17% QoQ. DCI modules: $142 million (+42% YoY, +3% QoQ).
    • Datacom: $278 million (-7% YoY, +2% QoQ) — demand strengthening.
Professional feature The full AI summary covers key highlights, financial performance and analyst Q&A.
Operator: Good afternoon. Welcome to Fabrinet's Financial Results Conference Call for 2026. At this time, all participants are in a listen-only mode. Instructions on how to participate will be provided at that time. 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. Please go ahead. 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 2026, which ended December 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 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
Professional feature The full transcript includes every speaker turn.