Fabrinet

Good afternoon. Welcome to Fibonacci Financial Results Conference Call for the third quarter of fiscal year 2026. At this time, all participants are on 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 Gara Tamajanian, Vice President 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 2026, which ended March 27, 2026. With me on the call today are Seamus Grady, Chairman and 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-Q filed on February 3, 2026. 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 Fabrinth's Chairman and CEO, Seamus Grady. Seamus?

SEAMUS GRADY Thank you, Gero. Good afternoon, everyone, and thanks for joining our call today. We delivered an outstanding financial performance in the third quarter. along with several notable achievements that we believe can extend our strong growth trends into the fourth quarter and fiscal year 2027. Revenue is above our guidance range at a record $1.214 billion, with year-over-year growth accelerating to an impressive 39%. Record non-gap EPS of $3.72 also exceeded our guidance range, reflecting continued excellent execution. Looking at our quarter by product area, optical communications revenue growth increased to 35% from a year ago. This was driven by 55% year-over-year growth in telecom revenue, which was fueled by strong growth in a wide range of products. Within telecom, data center interconnect revenue grew a robust 90% from a year ago and 38% from Q2 2020. and we believe strong, longer-term DCI growth trends remain firmly intact. This remarkable telecom performance more than offset softer-than-expected datacom revenue, which grew 4% year-over-year but declined 6% from Q2. Underlying datacom demand remains exceptionally strong. In fact, demand during the quarter far exceeded what we were able to ship, meaning our reported revenue does not fully reflect the true momentum of the business. Right now, demand is outpacing the broader supply of certain components, and we are actively working to narrow that gap. While we expect this supply-demand imbalance to persist into the fourth quarter, we remain optimistic that supply conditions will improve over time. The strong demand we are seeing today positions as well as that improvement unfolds. As we have outlined, our Datacom strategy is to continue supporting the strong demand trends we are seeing with our largest customer, while actively expanding into new high growth channels, such as direct engagement with hyperscalers and partnerships with merchant vendors. With that in mind, we're happy to report that we have made meaningful, tangible progress on both fronts. First, we're excited to share that we have successfully completed qualification and have already begun shipping two Datacom Transceiver programs directly to a hyperscale customer with initial ramp starting in the fourth quarter. We expect volumes to ramp steadily throughout fiscal 2027, with these programs becoming a meaningful contributor to our Datacom revenue over time. Second, building on the groundwork laid over the last several quarters, we are on track to qualify and ramp multiple merchant transceiver programs, including several for data center scale-out applications with existing and new customers. We expect production to begin in the second half of the calendar year aligning with the early part of fiscal 2027, with additional ramps progressing into the second half of the fiscal year. We expect this combination of hyperscale and merchant program wins to further diversify our Datacom revenue and provide multiple new growth factors in the new year and beyond. In non-optical communications, revenue jumped 52% year-over-year and 8% sequentially from Q2. This growth was driven primarily by high-performance compute revenue, which continues to ramp as we support our customers' transition to their latest product generation. At the same time, we are seeing encouraging traction beyond the current ramp, with new program wins and expanded scope across additional products that we will be manufacturing to support their accelerated computing infrastructure. We're also increasing capacity to align with the customers' ambitious growth plans, reflecting a deepening and increasingly strategic relationship. Automotive revenue moderated in the third quarter, as anticipated, with revenue decreasing modestly from Q2. This decline was more than offset by continued growth in industrial laser revenue, which was up 9% from a year ago and 7% from Q2. An important area of strategic focus for us over the past several years has been co-packaged optics, or CPO. In this space, we are deepening our engagement with customers across the CPO ecosystem, including optical components, external laser source pluggables, as well as other integrated precision optical packaging solutions, building on our longstanding silicon photonics expertise. CPO relies heavily on advanced semiconductor packaging technologies, and we have been actively investing to expand our capabilities in this area with the focus on scalable, high-quality manufacturing processes, and broader system-level integration. This includes leveraging and extending our in-house silicon photonics expertise, but also partnering with key technology providers to enhance our ability to deliver more integrated end-to-end manufacturing solutions. With that backdrop, we have made a minority investment in Raytech Semiconductor, a Taiwan-based provider of advanced wafer-level packaging technologies as an ecosystem partner. We already serve a number of common customers and expect this collaboration to further strengthen our capabilities and extend our offering. This investment supports our continued evolution from silicon photonics into more advanced packaging and integration solutions, reinforcing our role as a key manufacturing partner within the CPO ecosystem. Looking at our business as a whole, we are very excited by both the number and size of customer engagements for our advanced manufacturing services. The breadth and depth of these projects provides us with significant opportunities to demonstrate our differentiation and expertise that we've established as a key enabler for the success of our customers' most advanced products. As you know, we have been expanding our capacity to support our accelerating growth trends. We continue to make progress in the construction of Building 10, which will add 2 million square feet to our current 3.7 million square feet of space. With plans to be fully completed around the beginning of the new calendar year, we're on track to have a portion of Building 10 ready by next month, consistent with what we described last quarter. In addition to that, with our accelerated construction timeline, we now expect to commission an additional floor in this five-story structure by the end of September, with the rest of the building still scheduled to be completed by January. Beyond Building 10, we have sufficient land available at our campus in Chanbury for two additional buildings of more than 1 million square feet each. While this means we expect to have ample capacity available for the next several years, we continue to think ahead. In that context, we have recently acquired a building and land in the Vanakorn Industrial Estate in Thailand, not far from our Pinehurst campus. We have already begun renovations to make the existing 200,000 square foot building a world-class clean room factory with sufficient space on the eight-acre site for additional expansion at a later time. In summary, our success in the third quarter extends well beyond our strong financial performance. We are particularly encouraged by the multiple new growth vectors we are adding across our Datacom business, while our diversified telecom portfolio continues to show solid momentum and our non-optical communications segment expands further. This combination of execution and strategic progress reinforces our confidence in sustaining our growth trajectory, extending our leadership position in the fourth quarter and carrying that momentum into fiscal year 2027. Now I'd like to turn the call over to Chaba for more details on our third quarter results and our outlook for the fourth quarter. Chaba.