Fabrinet

Good afternoon. Welcome to the Federal Government's Financial Results Conference call for the first quarter of fiscal year 2025. 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 for today, Garo Tumajarian, Vice President of Investor Relations. Please go ahead.

Thank you, operator, and good afternoon, everyone. Thank you for joining us on today's conference call to discuss FABRA's financial and operating results for the first quarter of fiscal year 2025, which ended September 27, 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 investor 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-K filed on August 20, 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, Gerald. Good afternoon, and thanks to those of you joining our call today. We started fiscal year 2025 with significant momentum across our business. First quarter revenue of $804 million was well above the top end of our guidance range, increasing 17% from a year ago and 7% from Q4. Margins were very healthy with operating margin of 10.7% in the quarter. These results enabled us to deliver non-GAAP EPS at the upper end of our guidance range of $2.39, even after a $0.19 headwind from foreign exchange revaluations in the quarter. All in all, we're very proud of these results and our strong start to the fiscal year. As we anticipated, revenue was up sequentially and year over year for every major product group. In optical communications, Datacom revenue grew 36% from a year ago. driven mainly by optical interconnect products for AI applications. We remain optimistic about positive long-term Datacom trends for our business and our position as a leading contract manufacturer serving this rapidly expanding market. We are encouraged by the results of our telecom business in the quarter, which saw year-over-year revenue growth for the first time in six quarters. Demand for traditional telecom products appears to have leveled out, while growth continues to come from data center interconnect products, as well as telecom systems, where we continue to win business. We're optimistic that over time, the telecom headwinds that the industry has been experiencing will turn into tailwinds and that our telecom revenue growth will be further bolstered by continued demand for DCI and telecom system products. Turning to non-optical communications, We saw accelerating revenue growth in the quarter, driven mostly by strong automotive revenue that exceeded $100 million for the first time. Within the automotive market, EV charging infrastructure products continue to see excellent momentum. Industrial laser revenue was also strong, reaching its highest level in two years. We believe these strong automotive and industrial laser trends can continue into the second quarter. As you know, last quarter we announced that we would be breaking ground on building 10 during the fiscal year. I'm happy to report that we are making significant progress in lining up contractors and receiving the necessary approvals. We're optimistic that construction will begin by the end of the calendar year on this facility, which will increase our total footprint by more than 50% and help support our growth for the next several years. In summary, We had an excellent start to fiscal year 2025, highlighted by continued acceleration in revenue growth, while also continuing to deliver industry-leading operating margins. We're optimistic that our positive business momentum will extend into the second quarter, as reflected in the outlook that Chabba will discuss in a moment. Now I'll turn the call over to Chabba for more financial details on our first quarter and our guidance for the second quarter of fiscal 2025. Chabba.