Fabrinet Announces Third Quarter Fiscal Year 2026 Financial Results

Record Third Quarter Revenue and Earnings Per Share Exceed Guidance Ranges BANGKOK, May 04, 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 third fiscal quarter ended March 27, 2026. Seamus Grady, Chairman and Chief Executive Officer of Fabrinet, said, “Our third quarter was exceptionally strong, delivering record financial results that exceeded our guidance ranges. Growth was supported by numerous ongoing and ramping programs that continue to provide meaningful tailwinds. We expect several new customer agreements, particularly in the datacom market, to further strengthen our growth trajectory as we move into the fourth quarter and beyond.” Third Quarter Fiscal Year 2026 Financial Highlights GAAP Results Revenue for the third quarter of fiscal year 2026 was $1,214.3 million, compared to $871.8 million for the third quarter of fiscal year 2025. GAAP net income for the third quarter of fiscal year 2026 was $125.2 million, compared to $81.3 million for the third quarter of fiscal year 2025. GAAP net income per diluted share for the third quarter of fiscal year 2026 was $3.45, compared to $2.25 for the third quarter of fiscal year 2025. Non-GAAP Results Non-GAAP net income for the third quarter of fiscal year 2026 was $134.9 million, compared to $91.2 million for the third quarter of fiscal year 2025. Non-GAAP net income per diluted share for the third quarter of fiscal year 2026 was $3.72, compared to $2.52 for the third quarter of fiscal year 2025. Business Outlook Based on information available as of May 4, 2026, Fabrinet is issuing guidance for its fourth fiscal quarter ending June 26, 2026, as follows: Fabrinet expects fourth quarter revenue to be in the range of $1.25 billion to $1.29 billion. GAAP net income per diluted share is expected to be in the range of $3.48 to $3.63, 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 $3.72 to $3.87, 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 Third Quarter Fiscal Year 2026 Financial Results Call When: May 4, 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 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 fourth 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 February 3, 2026. 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) March 27, 2026 June 27, 2025 (unaudited) Assets Current assets Cash and cash equivalents $ 356,562 $ 306,425 Short-term investments 588,674 627,819 Trade accounts receivable, net of allowance for expected credit losses of $1,181 and $1,344, respectively 908,544 758,894 Inventories 875,988 581,015 Prepaid expenses 38,196 38,476 Other current assets 177,476 116,210 Total current assets 2,945,440 2,428,839 Non-current assets Long-term restricted cash 694 — Property, plant and equipment, net 524,973 380,640 Intangibles, net 2,392 2,156 Operating right-of-use assets 4,434 5,768 Deferred tax assets 17,266 13,406 Other non-current assets 13,787 623 Total non-current assets 563,546 402,593 Total Assets $ 3,508,986 $ 2,831,432 Liabilities and Shareholders’ Equity Current liabilities Trade accounts payable 859,004 637,417 Fixed assets payable 65,307 40,781 Operating lease liabilities, current portion 1,462 1,792 Income tax payable 7,611 7,939 Accrued payroll, bonus and related expenses 30,845 24,566 Accrued expenses 36,418 30,630 Severance liabilities, current portion 1,981 — Other payables 152,915 66,717 Total current liabilities 1,155,543 809,842 Non-current liabilities Deferred tax liability 1,216 1,595 Operating lease liability, non-current portion 2,963 3,679 Severance liabilities 31,501 31,225 Other non-current liabilities 13,052 3,279 Total non-current liabilities 48,732 39,778 Total Liabilities 1,204,275 849,620 Shareholders’ equity Preferred shares (5,000,000 shares authorized, $0.01 par value; no shares issued and outstanding as of March 27, 2026 and June 27, 2025) — — Ordinary shares (500,000,000 shares authorized, $0.01 par value; 39,717,065 shares and 39,602,152 shares issued as of March 27, 2026 and June 27, 2025, respectively; and 35,829,221 shares and 35,728,074 shares outstanding as of March 27, 2026 and June 27, 2025, respectively) 397 396 Additional paid-in capital 243,038 237,881 Less: Treasury shares (3,887,844 shares and 3,874,078 shares as of March 27, 2026 and June 27, 2025, respectively) (365,287 ) (360,056 ) Accumulated other comprehensive income (loss) (501 ) 10,294 Retained earnings 2,427,064 2,093,297 Total Shareholders’ Equity 2,304,711 1,981,812 Total Liabilities and Shareholders’ Equity $ 3,508,986 $ 2,831,432 FABRINET CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended Nine Months Ended (in thousands of U.S. dollars, except per share data) March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025 Revenues $ 1,214,293 $ 871,799 $ 3,325,309 $ 2,509,635 Cost of revenues (1,069,954 ) (769,616 ) (2,926,849 ) (2,207,577 ) Gross profit 144,339 102,183 398,460 302,058 Selling, general and administrative expenses (24,295 ) (22,063 ) (69,822 ) (65,300 ) Restructuring and other related costs — (1,264 ) — (1,367 ) Operating income 120,044 78,856 328,638 235,391 Interest income 7,421 10,145 25,393 32,392 Foreign exchange gain (loss), net 6,989 (2,675 ) 1,715 (5,728 ) Other income (expense), net (212 ) (30 ) (351 ) (111 ) Income before income taxes 134,242 86,296 355,395 261,944 Income tax expense (9,029 ) (5,006 ) (21,628 ) (16,624 ) Net income 125,213 81,290 333,767 245,320 Other comprehensive income (loss), net of tax: Change in net unrealized gain (loss) on available-for-sale securities (2,966 ) 3,350 (1,325 ) 9,647 Change in net unrealized gain (loss) on derivative instruments (11,946 ) 1,790 (9,382 ) 907 Change in foreign currency translation adjustment (28 ) 1,060 (88 ) 1,136 Total other comprehensive income (loss), net of tax (14,940 ) 6,200 (10,795 ) 11,690 Net comprehensive income $ 110,273 $ 87,490 $ 322,972 $ 257,010 Earnings per share Basic $ 3.49 $ 2.26 $ 9.32 $ 6.80 Diluted $ 3.45 $ 2.25 $ 9.22 $ 6.75 Weighted-average number of ordinary shares outstanding (in thousands of shares) Basic 35,828 35,914 35,809 36,094 Diluted 36,301 36,172 36,217 36,327 FABRINET CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended (in thousands of U.S. dollars) March 27, 2026 March 28, 2025 Cash flows from operating activities Net income for the period $ 333,767 $ 245,320 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 48,761 39,223 (Gain) loss on disposal of property, plant and equipment and intangibles 45 (39 ) Amortization of discount (premium) of short-term investments (3,622 ) (3,435 ) Inventory obsolescence impairment 2,389 — (Reversal of) allowance for expected credit losses (163 ) (374 ) Unrealized loss (gain) on exchange rate and fair value of foreign currency forward contracts (3,544 ) 4,067 Share-based compensation 26,369 24,903 Customer warrant 3,177 3,929 Deferred income tax expense (benefit) (3,333 ) (4,182 ) Other non-cash expenses 285 82 Changes in operating assets and liabilities Trade accounts receivable (150,082 ) (65,271 ) Inventories (297,362 ) (68,132 ) Other current assets and non-current assets (77,518 ) (2,357 ) Trade accounts payable 225,741 79,196 Income tax payable (328 ) 4,180 Accrued expenses (5,539 ) 12,643 Other payables 91,155 (152 ) Severance liabilities 2,663 2,131 Other current liabilities and non-current liabilities 8,897 1,540 Net cash provided by operating activities 201,758 273,272 Cash flows from investing activities Purchase of short-term investments (241,255 ) (304,189 ) Proceeds from maturities of short-term investments 282,697 122,129 Purchase of property, plant and equipment (160,634 ) (70,668 ) Purchase of intangibles (682 ) (514 ) Proceeds from disposal of property, plant and equipment 57 116 Net cash used in investing activities (119,817 ) (253,126 ) Cash flows from financing activities Repurchase of ordinary shares (5,231 ) (103,475 ) Withholding tax related to net share settlement of restricted share units (24,388 ) (20,918 ) Net cash used in financing activities (29,619 ) (124,393 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ 52,322 $ (104,247 ) 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 52,322 (104,247 ) Effect of exchange rate on cash, cash equivalents and restricted cash (1,491 ) 1,179 Cash, cash equivalents and restricted cash at the end of period $ 357,256 $ 306,905 Non-cash investing and financing activities Construction, software and equipment-related payables $ 65,307 $ 33,101 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) March 27, 2026 March 28, 2025 Cash and cash equivalents $ 356,562 $ 306,905 Restricted cash 694 — Cash, cash equivalents and restricted cash $ 357,256 $ 306,905 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 Nine Months Ended (in thousands of U.S. dollars) March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025 Revenues $ 1,214,293 $ 871,799 $ 3,325,309 $ 2,509,635 Gross profit (GAAP) $ 144,339 11.9 % $ 102,183 11.7 % $ 398,460 12.0 % $ 302,058 12.0 % Share-based compensation expenses 2,531 2,221 8,694 7,883 Gross profit (Non-GAAP) $ 146,870 12.1 % $ 104,404 12.0 % $ 407,154 12.2 % $ 309,941 12.4 % Reconciliation of GAAP Operating Profit and GAAP Operating Margin to Non-GAAP Operating Profit and Non-GAAP Operating Margin Three Months Ended Nine Months Ended (in thousands of U.S. dollars) March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025 Revenues $ 1,214,293 $ 871,799 $ 3,325,309 $ 2,509,635 Operating profit (GAAP) $ 120,044 9.9 % $ 78,856 9.0 % $ 328,638 9.9 % $ 235,391 9.4 % Share-based compensation expenses 8,541 7,783 26,369 24,903 Legal and litigation costs 497 827 1,007 827 Severance payment and others 613 — 685 748 Restructuring and other related costs — 1,264 — 1,367 Operating profit (Non-GAAP) $ 129,695 10.7 % $ 88,730 10.2 % $ 356,699 10.7 % $ 263,236 10.5 % 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 Nine Months Ended March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025 (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 $ 125,213 $ 3.45 $ 81,290 $ 2.25 $ 333,767 $ 9.22 $ 245,320 $ 6.75 Items reconciling GAAP net income & EPS to non-GAAP net income & EPS: Related to cost of revenues: Share-based compensation expenses 2,531 0.07 2,221 0.06 8,694 0.24 7,883 0.22 Total related to cost of revenues 2,531 0.07 2,221 0.06 8,694 0.24 7,883 0.22 Related to selling, general and administrative expenses: Share-based compensation expenses 6,010 0.16 5,562 0.16 17,675 0.48 17,020 0.47 Legal and litigation costs 497 0.02 827 0.02 1,007 0.03 827 0.02 Severance payment and others 613 0.02 — — 685 0.02 748 0.02 Total related to selling, general and administrative expenses 7,120 0.20 6,389 0.18 19,367 0.53 18,595 0.51 Related to other income and expense: Restructuring and other related costs — — 1,264 0.03 — — 1,367 0.04 Total related to other income and expense — — 1,264 0.03 — — 1,367 0.04 Total related to net income & EPS 9,651 0.27 9,874 0.27 28,061 0.77 27,845 0.77 Non-GAAP measures $ 134,864 $ 3.72 $ 91,164 $ 2.52 $ 361,828 $ 9.99 $ 273,165 $ 7.52 Shares used in computing diluted net income per share (in thousands of shares) GAAP diluted shares 36,301 36,172 36,217 36,327 Non-GAAP diluted shares 36,301 36,172 36,217 36,327 FABRINET RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (UNAUDITED) (in thousands of U.S. dollars) Three Months Ended Nine Months Ended March 27, 2026 March 28, 2025 March 27, 2026 March 28, 2025 Net cash provided by operating activities $ 52,931 $ 74,186 $ 201,758 $ 273,272 Less: Purchase of property, plant and equipment (63,760 ) (28,518 ) (160,634 ) (70,668 ) Non-GAAP free cash flow $ (10,829 ) $ 45,668 $ 41,124 $ 202,604 FABRINET GUIDANCE FOR QUARTER ENDING JUNE 26, 2026 RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES Diluted EPS GAAP net income per diluted share $3.48 to $3.63 Related to cost of revenues: Share-based compensation expenses 0.08 Total related to cost of revenues 0.08 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 0.24 Non-GAAP net income per diluted share $3.72 to $3.87 Source: Fabrinet