Fabrinet

Good afternoon and welcome to FRABINET's Financial Results Conference Call for the first quarter of fiscal year 2027. At this time, all participants are in a listen-only mode. Later, we'll 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'll now turn the call over to your host, Garo Toomajanian, VP of Investor Relations.

Thank you, Operator, and good afternoon, everyone. Welcome to today's conference call to discuss Fibernet's financial and operating results for the first quarter of fiscal year 2027, which ended September 25, 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 at investor.fibernet.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. Both 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 call, 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 FTC filing, in particular the section captioned Risk Factors in our Form 10-K, filed on August 18, 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 Aberneth'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 off to an excellent start to fiscal 2027, with first quarter revenue that was well above our guidance range and represents another quarter of accelerating growth. First quarter revenue of $1.474 billion increased a remarkable 51% from a year ago and 12% from the fourth quarter, with strong year-over-year and sequential growth from all three of our key revenue categories. In addition to delivering our highest top-line growth in 10 years, our revenue performance helps generate record non-GAAP earnings per share of $4.34, also well above the high end of our guidance range. Our impressive results are being driven by broad-based demand across multiple product areas, including continued strong momentum for data center interconnect, growing demand for data center transceivers, and expansion in high performance computing. Looking to the second quarter, we expect new program wins and ramps in addition to growth from existing programs to further enhance our growth profile while also supporting our industry-leading margins. We have discussed some of the new programs that we expect to contribute to our growth this year, in particular, hyperscale direct transceivers and merchant transceivers for the data center market. We are installing capacity to meet demand for optical circuit switches and multi-rail systems. We are also working with a number of customers on NPO and CPO opportunities and expect contributions from these programs toward the end of fiscal 2027. We continue to be extremely enthusiastic about these opportunities and their role in further scaling our business. In order to support the rapidly increasing demand and New Programme Wins across our business, we have taken a number of important steps. During the first quarter, we completed our purchase of a new site in Santa Clara, more than doubling our capacity in Silicon Valley. We are already in discussions with a handful of customers about leveraging this additional capacity. In Thailand, we have been expanding at multiple sites. We are just a few months away from completing Building 10. adding more than 50% to our global footprint. Having accelerated construction and qualification on portions of Building 10, we are already generating initial revenue from the facility. Our manufacturing expansion at Pinehurst and our new Navanacorn site, which is now up and running, are further helping us to stay ahead of increasing customer demand. However, even with this significant expansion, we foresee the need for additional space based on rapid growth from current engagements, combined with new programs that will be ramping in the quarters ahead. As such, we have made the decision to begin construction of Building 11 at our Chonburi campus as soon as Building 10 is completed in January. Building 11 will add approximately 1.5 million square feet, with incremental revenue capacity of approximately $3 billion. Even as we begin executing plans for Building 11, we are already exploring potential new sites to further support the unprecedented levels of customer activity we are experiencing. In summary, we delivered an excellent first quarter for a strong start to the fiscal year. We are seeing growing demand across the markets we serve and remain focused on executing to meet the exacting needs of our customers. At the same time, Thank you Seamus and good afternoon everyone.