Fabrinet

Good afternoon. Welcome to Fabrinet's Financial Results Conference call for the third quarter of fiscal year 2024. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and 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 Tumajanian, VP of Investor Relations. You may begin.

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 third quarter of fiscal year 2024, which ended March 29, 2024. With me on the call today are Seamus Grady, Chief Executive Officer, and Chavez Ferra, 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 investor 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 undertake no obligation to revise them in light of new information or future events, except as required by law. For a description of the risk factors that may affect our results, please refer to our recent SEC filings, in particular the section captioned Risk Factors, in our Form 10-Q, filed on February 6, 2024. We will begin the call with remarks from Seamus and Chaba, followed by time for questions. I would now like to turn the call over to Fabrinet's CEO, Seamus Grady. Seamus?

Thank you, Gero. Good afternoon to those of you joining our call today. We are very pleased with our third quarter results that included revenue and EPS that were above the high end of our guidance ranges. Revenue was a record $731.5 million, and non-GAAP net income was also a record result of $2.39 per share. The quarter played out better than anticipated with sequential revenue growth in optical communications from both Datacom and Telecom, accompanied by a small decline in non-optical communications, mainly from automotive revenue. Within optical communications, Datacom revenue again outpaced Telecom, with Datacom revenue growing 150% from a year ago. Datacom continues to benefit from demand for 800 gig technology for AI applications, and we remain very optimistic about our position in that market. After several quarters of declines, Telecom revenue saw sequential growth in Q3. However, it's important to point out that this growth was driven primarily from data center interconnect products, that more than offset continued sequential declines from traditional telecom. We expect to see continued choppiness in telecom revenue as our customers and their customers continue to work down elevated inventory levels. Turning to non-optical communications, we saw a small sequential revenue decline. This was primarily due to near-term inventory digestion for certain automotive products in the quarter. Consistent with our comments last quarter, we are optimistic that automotive revenue will increase sequentially in the fourth quarter. Industrial laser revenue remains stable in the third quarter. Looking to the fourth quarter, we are well positioned to end our fiscal year on a high note with another strong performance. High data rate Datacon products continue to be an important driver of our business momentum, and we are confident we can deliver another quarter of accelerating year-over-year revenue growth in Q4. With this momentum, fiscal 2024 will represent another year of record revenue for the company, with EPS again growing faster than revenue. In summary, we delivered a record third quarter with revenue and EPS that were above our guidance ranges. We're looking forward to a very solid finish to an outstanding year for our company, and we're optimistic about what lies ahead as we further extend our leadership in the market. Now I'll turn the call over to Chaba for more financial details on our third quarter and our guidance for the fourth quarter. Chaba.