Fabrinet (NYSE:FN) reported record fourth-quarter results for fiscal 2026, with revenue rising 45% year over year to $1.316 billion and non-GAAP earnings per share reaching $4.10, above the company’s guidance range. The fiscal fourth quarter ended June 26, 2026.
For the full fiscal year, revenue increased 36% to $4.6 billion, while non-GAAP EPS rose 39% to $14.09. Chairman and Chief Executive Officer Seamus Grady said the results reflected demand across multiple customers and markets rather than dependence on a single product category or customer.
Revenue Reporting Shift Highlights Data Center Exposure
Fabrinet said it has changed its revenue reporting structure to better reflect the end markets where customers’ products are deployed. The company will now report revenue in three categories: data centers; communications infrastructure; and automotive, industrial and other revenue.
Chief Financial Officer Csaba Sverha said the change is presentational and does not affect total revenue for any period. Under the revised structure, data center revenue was Fabrinet’s largest category during the fourth quarter.
- Data center revenue: $669 million, up 68% year over year and 13% sequentially, representing 51% of total revenue.
- Communications infrastructure revenue: $413 million, up 40% year over year and 1% sequentially, representing 31% of total revenue.
- Automotive, industrial and other revenue: $234 million, up 8% year over year and 9% sequentially, representing 18% of total revenue.
Within data centers, data center interconnect, or DCI, products were the largest contributor to quarterly growth, with an annualized revenue run rate exceeding $1 billion, Sverha said. High-performance computing also made a substantial contribution. The company expects growth in data center revenue during the fiscal first quarter, supported by transceivers, DCI and HPC products.
Communications infrastructure growth was broad-based across telecom systems, satellite communications and telecom components. The automotive, industrial and other segment benefited primarily from EV charging infrastructure products, with a smaller contribution from certain LiDAR customers.
Margins, Cash Flow and Customer Concentration
On a non-GAAP basis, fourth-quarter gross margin was 12.2%, up 10 basis points sequentially but down 30 basis points from a year earlier. Operating expenses were 1.3% of revenue, resulting in a 10.9% non-GAAP operating margin, the company’s highest level in three years.
GAAP net income totaled $139 million, or $3.83 per diluted share. Non-GAAP net income was $149 million, or $4.10 per diluted share.
Sverha said the company excluded two items from non-GAAP earnings: an approximately $56.7 million non-cash gain related to the remeasurement of its investment in Raytek, and a $57.4 million provision connected with Thailand’s top-up tax regime under the OECD global minimum tax framework. No cash was paid during fiscal 2026 related to the tax provision, he said.
Fabrinet ended the quarter with $876 million in cash and short-term investments, down $70 million from the prior quarter. Operating cash flow was $55 million, while capital expenditures were $92 million, producing free cash flow outflow of $37 million. For the full year, operating cash flow was $257 million and free cash flow was $4 million as the company continued investing in manufacturing capacity.
Four customers represented at least 10% of fiscal 2026 revenue: Cisco at 20%, Nvidia at 16%, Nokia at 11% and Amazon at 11%.
Capacity Expansion Continues
Fabrinet is expanding manufacturing capacity in Thailand and California to support customer demand and new program ramps. Building 10 at its Chonburi campus remains on track for completion by early 2027 and is expected to add 2 million square feet. The company has already qualified 250,000 square feet on the first floor and expects to qualify a similar amount on the third floor during the current quarter.
The company also converted 120,000 square feet of office space at its Pinehurst campus into manufacturing space and commissioned a newly acquired Navanakorn site that adds 200,000 square feet. In Santa Clara, Fabrinet acquired a campus near its existing Fabrinet West facility, including approximately 130,000 square feet of manufacturing space that will more than double its Silicon Valley footprint.
Grady said Fabrinet exited fiscal 2026 at an annualized revenue run rate of about $5.3 billion. He estimated that current and planned additions could ultimately support between $12.5 billion and $14 billion of revenue capacity over the coming years, depending on product mix. The company expects Building 10 to add roughly $3 billion to $3.5 billion of capacity, while the Navanakorn and Santa Clara additions could each contribute approximately $200 million to $250 million at full capacity.
Fiscal First-Quarter Outlook
For the first quarter of fiscal 2027, Fabrinet forecast revenue of $1.375 billion to $1.425 billion, representing 43% year-over-year growth at the midpoint. The company projected non-GAAP EPS of $4.10 to $4.25.
Sverha said normal first-quarter expense seasonality is expected to create a temporary margin headwind, though the company still expects operating leverage as revenue expands. Management said customer forecasts extend into fiscal 2027 and beyond, though those forecasts are not order commitments.
During the question-and-answer session, Grady said Fabrinet expects new data center transceiver programs to begin ramping as early as the current quarter. A merchant transceiver program is expected to begin in the December quarter, while other programs are expected to begin in early calendar 2027.
Grady also said the company sees near-term potential in near-packaged optics, or NPO, and is working on co-packaged optics with several customers. He said Fabrinet’s partnership with Raytek, which is expected to add capacity at Fabrinet’s Thailand campus, could help provide packaging capabilities for future optical products.
Management said it remains optimistic about opportunities in DCI, optical circuit switching, satellite communications and complete network systems, while continuing to emphasize that it provides formal guidance only one quarter at a time.
About Fabrinet (NYSE:FN)
Fabrinet is a global provider of advanced optical packaging and precision optical, electro‐mechanical and electronic manufacturing services (CEM). The company specializes in complex manufacturing processes for original equipment manufacturers (OEMs) in communications, data center, industrial, instrumentation and medical markets. Key capabilities include high‐precision fiber alignment, micro‐assembly, testing and diagnostics, and integration of electro‐optic subassemblies.
Incorporated in 2000, Fabrinet operates under a corporate structure headquartered in Singapore with additional regional offices and design centers in the Americas, Europe and Asia.
