Fabrinet posts record revenue as telecom and DCI growth offset datacom constraints

Transcript intelligence

What changed

Fabrinet moved from the prior quarter's expectation of a later 1.6-terabit ramp and planned capacity expansion to a record Q4, stronger telecom and DCI contribution, explicit component shortages affecting datacom, a new HPC reporting category, and Q1 FY26 guidance.

Guidance delta

Management maintained a confident outlook and provided Q1 FY26 guidance of $910 million to $950 million in revenue and $2.75 to $2.90 in EPS, with gross margin targeted in the mid-50% range.

Key takeaways

• Q4 revenue reached a record $910 million, up 21% year over year, with non-GAAP EPS of $2.65.
• Telecom revenue rose 46% year over year, with data center interconnect a distinct growth segment.
• Demand for 1.6-terabit datacom products was strong, but component shortages are expected to weigh on the near term.
• AWS, high-performance computing, and Building 10 capacity expansion are central to the FY26 plan.

Management priorities

• Accelerate partial completion of Building 10 to meet demand.
• Ramp the new telecom system and high-performance computing programs.
• Expand data center interconnect and 1.6-terabit transceiver offerings.
• Address component supply constraints affecting datacom.
• Maintain the share repurchase program, with $174 million allocated for FY26.