Fabrinet

Good afternoon. Welcome to FabriNet's Financial Results Conference call for the fourth quarter of fiscal year 2026. 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 Toomajanian, Vice President of Investor Relations.

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 fourth quarter of fiscal year 2026, which ended June 26, 2026. With me on the call today are Seamus Grady, Chairman and Chief Executive Officer, and Csaba Sverha, 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 ACC filings, in particular the section captioned Risk Factors in our Form 10Q, filed on May 5, 2026. We will begin the call with remarks from Seamus and Csaba, followed by time for questions. I would now like to turn the call over to Fabrinet's Chairman and CEO, Seamus Grady. Seamus? SEAMUS GRADY Thank you, Garo.

Good afternoon, everyone, and thank you for joining our call today. We are delighted to report an outstanding fourth quarter that ended a remarkable year of accelerating year-over-year revenue growth, and we are enthusiastic that our momentum will extend in the first quarter and through fiscal year 2027. Fourth quarter revenue of $1.316 billion increased 45% year-over-year and exceeded the top end of our guidance range. This revenue upside flowed through to the bottom line with non-GAAP EPS of $4.10, which was also above our guidance range. We were pleased to see success from multiple sustainable growth drivers simultaneously supporting our business as we closed out fiscal 2026, and we are excited to anticipate an even stronger fiscal 2027. For all of fiscal 2026, revenue was an impressive Thank you. particularly evident at customers addressing the data center market as well as those serving the communications infrastructure market. Demand from these markets continues to increase which makes us optimistic about the long-term durability of these trends. Before we get into the details of our results, I'd like to highlight a change in the way we will be reporting our revenue breakdown going forward. As complex optical and electronic products become more and more prevalent inside and many others. In order for our revenue breakdown to better reflect the end markets we ultimately serve, going forward, we will focus on three revenue categories. Number one, data centers. Number two, communications infrastructure. And number three, automotive, industrial, and other revenue. In addition to being better aligned with the markets we ultimately serve, this also simplifies our reporting. We will continue to provide color on trends within all of these categories to extend our transparent revenue reporting practices and to help investors better understand the underlying drivers of our business. I would now like to talk about capacity. As you know, we have been rapidly increasing our manufacturing footprint in order to stay ahead of rising demand, and we are excited to report a number of milestones. At Building 10 in our Chonbury campus, We remain on track to complete building 10 by early 2027, which will add a total of 2 million square feet to our footprint. We have already qualified 250,000 square feet on the first floor of this facility, and we expect a similar amount on the third floor to be qualified this quarter. At our Pinehurst campus, we have completed the conversion of 120,000 square feet of office space into manufacturing space. We have also completed the acquisition of our new site in Navanacorn earlier in the fourth quarter, and we are happy to report that this building has just been commissioned, adding another 200,000 square feet of space. In addition to these capacity increases in Thailand, we have also been focused on expanding our footprint at Fabrinet West. Our Santa Clara operations are primarily focused on helping customers, many of which are in the same neighborhood, bring new products to market. Since Fabernet West is an on-ramp to Bangkok, success here is measured by how efficiently we transfer production of products to Thailand for higher volume, low-cost manufacturing at scale. To support increasing demand for these new product introduction and related services, we recently completed the acquisition of a campus at Great America Place in Santa Clara, less than a mile away from our existing facility on Patrick Henry Drive. This campus consists of two office buildings and a large manufacturing space of approximately 130,000 square feet that will more than double our Silicon Valley footprint and help support our long-term growth. Looking back at fiscal 2026, it was a remarkable year with accelerating revenue growth and record profits. More importantly, we have set the stage for another incredible year in fiscal 2027 as our strategy plays out. In addition to increasing demand across our existing business, we will see our growth bolstered by recent program wins as we continue to pursue further opportunities across our key markets. In summary, this is an incredible time at Fabernet as we benefit from our focus on complex, high growth markets. And we are proud to be winning more than our fair share of the opportunities. With accelerating Thank you Seamus and good afternoon everyone.