Fabrinet Announces Second Quarter Fiscal Year 2026 Financial Results

Record Second Quarter Revenue and Earnings Per Share Above Guidance Ranges BANGKOK, Feb. 02, 2026 (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 second fiscal quarter ended December 26, 2025. Seamus Grady, Chairman and Chief Executive Officer of Fabrinet, said, “We delivered an exceptional second quarter with record revenue and earnings that significantly exceeded our guidance ranges. Multiple large, key strategic programs across our business all contributed to our outstanding performance. At the same time, excellent execution and strong operating leverage generated record earnings per share that was also above our guidance range. We are confident that the same business drivers that helped produce these results will extend into the third quarter, as reflected in our strong guidance.” Second Quarter Fiscal Year 2026 Financial Highlights GAAP Results Revenue for the second quarter of fiscal year 2026 was $1,132.9 million, compared to $833.6 million for the second quarter of fiscal year 2025. GAAP net income for the second quarter of fiscal year 2026 was $112.6 million, compared to $86.6 million for the second quarter of fiscal year 2025. GAAP net income per diluted share for the second quarter of fiscal year 2026 was $3.11, compared to $2.38 for the second quarter of fiscal year 2025. Non-GAAP Results Non-GAAP net income for the second quarter of fiscal year 2026 was $121.6 million, compared to $95.1 million for the second quarter of fiscal year 2025. Non-GAAP net income per diluted share for the second quarter of fiscal year 2026 was $3.36, compared to $2.61 for the second quarter of fiscal year 2025. Business Outlook Based on information available as of February 2, 2026, Fabrinet is issuing guidance for its third fiscal quarter ending March 27, 2026, as follows: Fabrinet expects third quarter revenue to be in the range of $1.15 billion to $1.20 billion. GAAP net income per diluted share is expected to be in the range of $3.22 to $3.37, based on approximately 36.3 million fully diluted shares outstanding. Non-GAAP net income per diluted share is expected to be in the range of $3.45 to $3.60, based on approximately 36.3 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 Second Quarter Fiscal Year 2026 Financial Results Call When: February 2, 2026 Time: 5:00 p.m. ET Live 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 confidence that the same powerful drivers that produced our second quarter results will extend into the third 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 third 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 Quarterly Report on Form 10-Q filed with the SEC on November 4, 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 Toomajanian [email protected] FABRINET CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands of U.S. dollars, except share data and par value) December 26, 2025 June 27, 2025 (unaudited) Assets Current assets Cash and cash equivalents $ 319,855 $ 306,425 Short-term investments 640,918 627,819 Trade accounts receivable, net of allowance for expected credit losses of $1,296 and $1,344, respectively 801,671 758,894 Inventories 798,910 581,015 Prepaid expenses 33,516 38,476 Other current assets 178,931 116,210 Total current assets 2,773,801 2,428,839 Non-current assets Long-term restricted cash 682 — Property, plant and equipment, net 460,142 380,640 Intangibles, net 2,233 2,156 Operating right-of-use assets 4,888 5,768 Deferred tax assets 15,471 13,406 Other non-current assets 11,381 623 Total non-current assets 494,797 402,593 Total Assets $ 3,268,598 $ 2,831,432 Liabilities and Shareholders’ Equity Current liabilities Trade accounts payable 783,681 637,417 Fixed assets payable 53,874 40,781 Operating lease liabilities, current portion 1,691 1,792 Income tax payable 7,998 7,939 Accrued payroll, bonus and related expenses 25,726 24,566 Accrued expenses 25,026 30,630 Severance liabilities, current portion 2,087 — Other payables 136,534 66,717 Total current liabilities 1,036,617 809,842 Non-current liabilities Deferred tax liability 2,359 1,595 Operating lease liability, non-current portion 3,194 3,679 Severance liabilities 32,406 31,225 Other non-current liabilities 9,236 3,279 Total non-current liabilities 47,195 39,778 Total Liabilities 1,083,812 849,620 Shareholders’ equity Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of December 26, 2025 and June 27, 2025) — — Ordinary shares (500,000,000 shares authorized, $0.01 par value; 39,709,931 shares and 39,602,152 shares issued as of December 26, 2025 and June 27, 2025, respectively; and 35,822,444 shares and 35,728,074 shares outstanding as of December 26, 2025 and June 27, 2025, respectively) 397 396 Additional paid-in capital 233,235 237,881 Less: Treasury shares (3,887,487 shares and 3,874,078 shares as of December 26, 2025 and June 27, 2025, respectively) (365,136 ) (360,056 ) Accumulated other comprehensive income (loss) 14,439 10,294 Retained earnings 2,301,851 2,093,297 Total Shareholders’ Equity 2,184,786 1,981,812 Total Liabilities and Shareholders’ Equity $ 3,268,598 $ 2,831,432 FABRINET CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME(UNAUDITED) Three Months Ended Six Months Ended (in thousands of U.S. dollars, except per share data) December 26, 2025 December 27, 2024 December 26, 2025 December 27, 2024 Revenues $ 1,132,888 $ 833,608 $ 2,111,016 $ 1,637,836 Cost of revenues (995,206 ) (732,759 ) (1,856,895 ) (1,437,961 ) Gross profit 137,682 100,849 254,121 199,875 Selling, general and administrative expenses (23,281 ) (21,206 ) (45,527 ) (43,237 ) Restructuring and other related costs — (46 ) — (103 ) Operating income 114,401 79,597 208,594 156,535 Interest income 8,555 11,314 17,972 22,247 Foreign exchange gain (loss), net (3,214 ) 4,042 (5,274 ) (3,053 ) Other income (expense), net (17 ) (62 ) (139 ) (81 ) Income before income taxes 119,725 94,891 221,153 175,648 Income tax expense (7,097 ) (8,255 ) (12,599 ) (11,618 ) Net income 112,628 86,636 208,554 164,030 Other comprehensive income (loss), net of tax: Change in net unrealized gain (loss) on available-for-sale securities 2,452 (521 ) 1,641 6,297 Change in net unrealized gain (loss) on derivative instruments 4,626 (9,416 ) 2,564 (883 ) Change in foreign currency translation adjustment 29 428 (60 ) 76 Total other comprehensive income (loss), net of tax 7,107 (9,509 ) 4,145 5,490 Net comprehensive income $ 119,735 $ 77,127 $ 212,699 $ 169,520 Earnings per share Basic $ 3.14 $ 2.40 $ 5.83 $ 4.53 Diluted $ 3.11 $ 2.38 $ 5.77 $ 4.51 Weighted-average number of ordinary shares outstanding (in thousands of shares) Basic 35,828 36,163 35,800 36,183 Diluted 36,253 36,402 36,175 36,405 FABRINET CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended (in thousands of U.S. dollars) December 26, 2025 December 27, 2024 Cash flows from operating activities Net income for the period $ 208,554 $ 164,030 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 30,965 25,796 (Gain) loss on disposal of property, plant and equipment and intangibles (13 ) (37 ) Amortization of discount (premium) of short-term investments (2,417 ) (2,225 ) Inventory obsolescence impairment 3,142 — (Reversal of) allowance for expected credit losses (48 ) (384 ) Unrealized loss (gain) on exchange rate and fair value of foreign currency forward contracts 3,919 1,345 Share-based compensation 17,828 17,120 Customer warrant 1,149 — Deferred income tax expense (benefit) (1,054 ) (3,493 ) Other non-cash expenses 176 30 Changes in operating assets and liabilities Trade accounts receivable (42,829 ) (87,178 ) Inventories (221,037 ) (25,953 ) Other current assets and non-current assets (68,064 ) 9,536 Trade accounts payable 147,211 88,272 Income tax payable 59 4,304 Accrued expenses (3,041 ) 8,124 Other payables 70,648 186 Severance liabilities 1,816 1,565 Other current liabilities and non-current liabilities 1,863 (1,952 ) Net cash provided by operating activities 148,827 199,086 Cash flows from investing activities Purchase of short-term investments (179,628 ) (155,936 ) Proceeds from maturities of short-term investments 170,589 82,129 Purchase of property, plant and equipment (96,874 ) (42,150 ) Purchase of intangibles (229 ) (227 ) Proceeds from disposal of property, plant and equipment 25 110 Net cash used in investing activities (106,117 ) (116,074 ) Cash flows from financing activities Repurchase of ordinary shares (5,080 ) (68,700 ) Withholding tax related to net share settlement of restricted share units (23,622 ) (20,714 ) Net cash used in financing activities (28,702 ) (89,414 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ 14,008 $ (6,402 ) Movement in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash at the beginning of period $ 306,425 $ 409,973 Increase (decrease) in cash, cash equivalents and restricted cash 14,008 (6,402 ) Effect of exchange rate on cash, cash equivalents and restricted cash 104 91 Cash, cash equivalents and restricted cash at the end of period $ 320,537 $ 403,662 Non-cash investing and financing activities Construction, software and equipment-related payables $ 53,874 $ 20,594 FABRINET CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows: As of (in thousands of U.S. dollars) December 26, 2025 December 27, 2024 Cash and cash equivalents $ 319,855 $ 403,662 Restricted cash 682 — Cash, cash equivalents and restricted cash $ 320,537 $ 403,662 FABRINET RECONCILIATION 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 Six Months Ended (in thousands of U.S. dollars) December 26, 2025 December 27, 2024 December 26, 2025 December 27, 2024 Revenues $ 1,132,888 $ 833,608 $ 2,111,016 $ 1,637,836 Gross profit (GAAP) $ 137,682 12.2 % $ 100,849 12.1 % $ 254,121 12.0 % $ 199,875 12.2 % Share-based compensation expenses 2,644 2,764 6,163 5,662 Gross profit (Non-GAAP) $ 140,326 12.4 % $ 103,613 12.4 % $ 260,284 12.3 % $ 205,537 12.5 % Reconciliation of GAAP Operating Profit and GAAP Operating Margin to Non-GAAP Operating Profit and Non-GAAP Operating Margin Three Months Ended Six Months Ended (in thousands of U.S. dollars) December 26, 2025 December 27, 2024 December 26, 2025 December 27, 2024 Revenues $ 1,132,888 $ 833,608 $ 2,111,016 $ 1,637,836 Operating profit (GAAP) $ 114,401 10.1 % $ 79,597 9.5 % $ 208,594 9.9 % $ 156,535 9.6 % Share-based compensation expenses 8,757 8,438 17,828 17,120 Legal and litigation costs 254 — 510 — Severance payment and others — 18 72 748 Restructuring and other related costs — 46 — 103 Operating profit (Non-GAAP) $ 123,412 10.9 % $ 88,099 10.6 % $ 227,004 10.8 % $ 174,506 10.7 % FABRINET RECONCILIATION 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 Six Months Ended December 26, 2025 December 27, 2024 December 26, 2025 December 27, 2024 (in thousands of U.S. dollars, except per share data) Net income Diluted EPS Net income Diluted EPS Net income Diluted EPS Net income Diluted EPS GAAP measures $ 112,628 $ 3.11 $ 86,636 $ 2.38 $ 208,554 $ 5.77 $ 164,030 $ 4.51 Items reconciling GAAP net income & EPS to non-GAAP net income & EPS: Related to cost of revenues: Share-based compensation expenses 2,644 0.07 2,764 0.08 6,163 0.17 5,662 0.16 Total related to cost of revenues 2,644 0.07 2,764 0.08 6,163 0.17 5,662 0.16 Related to selling, general and administrative expenses: Share-based compensation expenses 6,113 0.17 5,674 0.15 11,665 0.32 11,458 0.31 Legal and litigation costs 254 0.01 — — 510 0.01 — — Severance payment and others — — 18 0.00 72 0.00 748 0.02 Total related to selling, general and administrative expenses 6,367 0.18 5,692 0.15 12,247 0.33 12,206 0.33 Related to other income and expense: Restructuring and other related costs — — 46 0.00 — — 103 0.00 Total related to other income and expense — — 46 0.00 — — 103 0.00 Total related to net income & EPS 9,011 0.25 8,502 0.23 18,410 0.50 17,971 0.49 Non-GAAP measures $ 121,639 $ 3.36 $ 95,138 $ 2.61 $ 226,964 $ 6.27 $ 182,001 $ 5.00 Shares used in computing diluted net income per share (in thousands of shares) GAAP diluted shares 36,253 36,402 36,175 36,405 Non-GAAP diluted shares 36,253 36,402 36,175 36,405 FABRINET RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (UNAUDITED) (in thousands of U.S. dollars) Three Months Ended Six Months Ended December 26, 2025 December 27, 2024 December 26, 2025 December 27, 2024 Net cash provided by operating activities $ 46,259 $ 115,904 $ 148,827 $ 199,086 Less: Purchase of property, plant and equipment (51,608 ) (21,900 ) (96,874 ) (42,150 ) Non-GAAP free cash flow $ (5,349 ) $ 94,004 $ 51,953 $ 156,936 FABRINET GUIDANCE FOR QUARTER ENDING MARCH 27, 2026 RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES Diluted EPS GAAP net income per diluted share $3.22 to $3.37 Related to cost of revenues: Share-based compensation expenses 0.07 Total related to cost of revenues 0.07 Related to selling, general and administrative expenses: Share-based compensation expenses 0.16 Total related to selling, general and administrative expenses 0.16 Total related to net income & EPS 0.23 Non-GAAP net income per diluted share $3.45 to $3.60 Source: Fabrinet