Q2 2026 Fabrinet Earnings Call Transcript
Key Points
- Fabrinet (FN) reported record revenue of $1.13 billion for Q2 2026, marking a 36% year-over-year growth and a 16% increase from the previous quarter.
- Non-GAAP EPS reached a new high at $3.36 per share, surpassing guidance despite FX headwinds.
- Optical Communications revenue grew by 29% year-over-year, with Telecom revenue hitting a record $554 million, a 59% increase from the previous year.
- Non-Optical Communications revenue surged by 61% year-over-year, driven by High-Performance Computing (HPC) products, which contributed $86 million in the quarter.
- Fabrinet (FN) is expanding its capacity with the construction of Building 10, a 2 million square foot facility, expected to be completed by the end of 2026, and additional manufacturing space at the Pinehurst campus.
- Automotive revenue, while up 12% year-over-year, experienced a slight sequential decline as anticipated.
- Datacom revenue declined 7% year-over-year, although it showed a 2% sequential increase.
- The company faced a $3 million FX revaluation loss, impacting non-GAAP EPS by $0.09 per share.
- Free cash flow was negative, with an outflow of $5 million for the quarter due to high capital expenditures.
- Fabrinet (FN) anticipates continued FX headwinds in Q3, which could impact financial performance.
Good afternoon. Welcome to Fabrinet's financial results conference call for the second quarter of fiscal year 2026. (Operator Instructions) As a reminder, today's call is being recorded.
I would now like to turn the call over to your host, Garo Toomajanian, VP 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 Fabrinet's financial and operating results for the second quarter of fiscal year 2026, which ended December 26, 2025. 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 Investors 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 Investors section of our website for important information, including our earnings press release and investor presentation
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