Financial Performance - Q3 revenue reached a record of $731.5 million[52], exceeding previous guidance - Q3 non-GAAP EPS also hit a new quarterly record at $2.39[52], surpassing guidance - Revenue for the quarter ended March 29, 2024, was $731.5 million, a 10% increase year-over-year[34] - Non-GAAP gross profit for the quarter was $92.5 million, with a gross margin of 12.6%[34] - Non-GAAP operating profit was $78.0 million, resulting in an operating margin of 10.7%[34] - GAAP net income was $80.9 million, while non-GAAP net income reached $87.7 million[34] Revenue Breakdown - Optical communications revenue was $591.4 million in F3Q24[57] - Non-optical communications revenue was $140.1 million in F3Q24[57] - Datacom revenue within optical communications was $305.5 million in F3Q24[57], representing 52% of optical revenue[38] - Telecom revenue within optical communications was $286.0 million in F3Q24[57], accounting for 48% of optical revenue[38] - Revenue from products with speeds >=400-Gig was $426.3 million in F3Q24[58] Balance Sheet - Cash, cash equivalents, marketable securities, and restricted cash totaled $794.0 million[53] - Working capital stood at $609.0 million[53] - Total debt was $3.0 million[53] - Total shareholders' equity was $1,660.2 million[53]

Financial Data and Key Metrics Changes - The company reported record revenue of $731.5 million, up 10% year-over-year and up 3% sequentially, exceeding guidance ranges [25][29] - Non-GAAP net income reached a record of $87.7 million or $2.39 per diluted share, also above guidance [54][57] - Operating income was $78 million, with an operating margin of 10.7%, consistent with the previous quarter [15][25] Business Line Data and Key Metrics Changes - Optical communications revenue was $591.4 million, accounting for 81% of total revenue, an increase of 18% year-over-year and 4% sequentially [11] - Datacom revenue was $305.5 million, representing 52% of optical communications revenue, growing 150% year-over-year and 6% sequentially, driven by high data rate products for AI applications [31] - Telecom revenue was $286 million, down 25% year-over-year but up 2% sequentially, primarily due to data center interconnect growth [12][26] - Non-optical communications revenue was $140.1 million, down 3% from the previous quarter, mainly due to inventory absorption in automotive products [13] Market Data and Key Metrics Changes - The company anticipates datacom revenue to slightly increase sequentially in the fourth quarter, driven by high data rate products for AI [56] - Telecom revenue is expected to decline sequentially in the fourth quarter due to ongoing inventory absorption [37][59] Company Strategy and Development Direction - The company is optimistic about its position in the datacom market, particularly with the demand for 800 gig technology for AI applications [6][8] - The transition to higher data rate products is seen as a key growth driver, with expectations that 1.6 terabit products will complement rather than cannibalize 800 gig products [42][62] - The company is evaluating capacity expansion options, with potential plans for a new building to support future demand [72][73] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering strong results in the fourth quarter, anticipating another record year for revenue and profitability [57] - The telecom sector is expected to face challenges for several quarters due to inventory digestion, with growth not anticipated until early to mid-2025 [59] - The company remains well-positioned to capitalize on demand for optical interconnects in AI data centers, with a strong execution track record [51][64] Other Important Information - The company repurchased approximately 153,000 shares at an average price of $193.76 per share, totaling $29.6 million, with $64.1 million remaining in the share repurchase authorization [17] - Cash and short-term investments were $794 million at the end of the third quarter, up $53.4 million from the previous quarter, driven by strong operating cash flow [36] Q&A Session Summary Question: Follow-up on datacom revenue growth - Management noted that datacom revenue growth was strong despite the rolling off of the 100 gig business, with underlying growth remaining robust [21][61] Question: Discussion on customer design wins for 800 gig and 1.6T - Management confirmed that 800 gig demand remains strong and that they are preparing for the next generation 1.6 terabit products, which are expected to be additive to existing products [44][45] Question: Outlook on telecom revenues and inventory digestion - Management indicated that telecom revenue softness is expected to continue for several quarters, with a return to growth not anticipated until early to mid-2025 [58][59] Question: Capacity planning and expansion - Management discussed ongoing evaluations for capacity expansion, with potential plans for a new building to support increased demand, estimating an 18-month timeline from decision to operational readiness [71][73]

Fabrinet (FN) came out with quarterly earnings of $2.39 per share, beating the Zacks Consensus Estimate of $2.12 per share. This compares to earnings of $1.94 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 12.74%. A quarter ago, it was expected that this company that assembles optical, electro-mechanical and electronic devices for other companies would post earnings of $2.04 per share when it actually produced earnings of $2. ...

Exhibit 99.1 Fabrinet Announces Third Quarter Fiscal Year 2024 Financial Results • Exceeds Guidance Ranges with Record Revenue and Net Income Per Share Guidance for non-GAAP net income per diluted share excludes share-based compensation expenses and certain non-recurring items. A reconciliation of non-GAAP net income per diluted share to the corresponding GAAP measure is available at the end of this press release. Conference Call Information | What: | Fabrinet Third Quarter Fiscal Year 2024 Financial Result ...

5G stocks have an increasingly bad rap, as initial trends (reminiscent of blockchain enthusiasm, then artificial intelligence exuberance) pointed to every 5G company as a millionaire-maker. But, just as we saw with blockchain and are starting to see with AI, only a handful of companies are truly innovative and worth buying for the long-term: the rest are riding the tailcoats of others’ initiatives. But, now that the dust has settled over the wider industry, those top 5G stocks are coming to the surface — at ...

Fabrinet (NYSE:FN) stock is down on Wednesday after announcing the date for its next earnings report.Fabrinet announced that it will release earnings for its fiscal third quarter of 2024 on May 6. This will cover earnings for the quarter that ended on March 29, 2024.Fabrinet will release its earnings after markets closed that day. The company will also hold a conference call at 4:30 p.m. Eastern Time to go over the results. A webcast will also be available on its website afterward.What That Means for FN Sto ...

Automotive ◼ EV Charging ◼ LIDAR ◼ LED & Laser Lighting ◼ Safety & Control Sensors Industrial Lasers ◼ Lasers ◼ Solid-State Lasers ◼ Gas Lasers ◼ Ultrafast Lasers Other ◼ Medical Diagnostics ◼ Metrology & Instrumentation ◼ Pressure & Temperature Sensors Customized Optics and Passive Devices – Vertical Integration ◼ Beam Splitters, Prisms, Laser Crystals, Waveplates, Ferrules 4 Pinehurst Campus, Thailand Casix, China Vitrocom, NJ, USA Custom Optics Fabrinet Israel Fabrinet West, CA, USA Chonburi Campus, Thai ...

Financial Data and Key Metrics Changes - The company reported record revenue of $712.7 million for the second quarter, up 7% year-over-year and 4% sequentially [102][125] - Non-GAAP earnings per share reached $2.08, exceeding guidance and marking a new quarterly record [102][130] - Operating margins improved to 10.7%, a 20 basis point increase from the first quarter [104][130] Business Line Data and Key Metrics Changes - Datacom revenue was $288.1 million, surpassing telecom revenue for the first time, driven by AI optical interconnect products [128] - Telecom revenue was $279.8 million, a 4% sequential decline due to inventory absorption, but expected to stabilize in the third quarter [103][100] - Non-optical communications revenue decreased 5% sequentially to $144.8 million, primarily due to automotive inventory absorption [129] Market Data and Key Metrics Changes - Products rated 400-gig and faster grew 118% year-over-year and 18% from the first quarter, representing two-thirds of total optical communications revenue [128] - The company anticipates continued growth in datacom revenue, primarily driven by AI applications, while telecom is expected to show modest sequential growth [126][131] Company Strategy and Development Direction - The company is focused on expanding its capacity to meet strong demand for optical interconnects, particularly in AI applications [136] - There is a strategic shift towards datacom being larger than telecom, driven by AI growth and cloudification trends [154] - The company is optimistic about its pipeline for high-speed optical programs, particularly in the 400-gig and above segment [11][128] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to deliver strong results in the third quarter, despite some moderation in datacom growth [9][126] - The company is navigating inventory absorption in the telecom sector but expects this to stabilize, allowing for slight revenue growth [100][131] - Management highlighted the early stages of the AI market and its potential for long-term growth, emphasizing the need for optical interconnects [43][146] Other Important Information - The company repurchased approximately 38,000 shares at an average price of $166.61, with $93.6 million remaining in the share repurchase authorization [8] - The effective GAAP tax rate was 5.2%, consistent with expectations for the fiscal year [130] Q&A Session Summary Question: What is the outlook for the telecom business in the third quarter? - Management indicated that telecom revenue is expected to show modest sequential growth, driven by stabilization of inventory issues and demand for data center interconnect products [131] Question: How is the company addressing capacity constraints in AI production? - Management confirmed that they are not constrained by demand and are actively adding capacity to meet the needs of AI programs [143] Question: Can you provide insights on the impact of the Intel business transfer? - The transfer of the Intel business is expected to impact revenue in the third quarter, but management is confident in the overall growth trajectory [91][160]

[PART I. FINANCIAL INFORMATION](index=8&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) The unaudited financial statements for the quarter ended December 29, 2023, detail the company's financial position and performance [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $2.13 billion, driven by higher current assets, while stable liabilities boosted shareholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands USD) | Account | Dec 29, 2023 | June 30, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $1,806,363 | $1,652,540 | | **Total Assets** | **$2,133,138** | **$1,979,648** | | **Total Current Liabilities** | $486,777 | $481,885 | | **Total Liabilities** | **$521,756** | **$510,990** | | **Total Shareholders' Equity** | **$1,611,382** | **$1,468,658** | - Inventories decreased from $519.6 million at June 30, 2023, to $414.8 million at December 29, 2023, **indicating improved inventory management**[16](index=16&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Revenue and net income grew for both the three and six-month periods ending December 29, 2023, driven by strong performance Key Performance Indicators (in thousands USD, except per share data) | Metric | Q2 FY24 (Three Months) | Q2 FY23 (Three Months) | Six Months FY24 | Six Months FY23 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $712,694 | $668,656 | $1,398,171 | $1,324,085 | | **Gross Profit** | $88,330 | $85,215 | $172,734 | $167,971 | | **Operating Income** | $69,014 | $66,285 | $132,989 | $128,476 | | **Net Income** | $69,110 | $63,157 | $134,199 | $127,772 | | **Diluted EPS** | $1.89 | $1.71 | $3.67 | $3.47 | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased significantly due to a substantial positive change in inventories Cash Flow Summary (Six Months Ended, in thousands USD) | Cash Flow Activity | Dec 29, 2023 | Dec 30, 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $229,214 | $105,100 | | **Net cash used in investing activities** | ($101,853) | ($21,580) | | **Net cash used in financing activities** | ($24,818) | ($31,045) | | **Net increase in cash** | $102,543 | $52,475 | - The significant increase in operating cash flow was primarily driven by a **$104.8 million positive change from inventories**, compared to a $20.5 million positive change in the prior year period[29](index=29&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Disclosures highlight a revenue shift towards the Asia-Pacific region and ongoing share repurchase activity Revenue by End Market (Six Months Ended, in thousands USD) | End Market | Dec 29, 2023 | % of Total | Dec 30, 2022 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Optical communications | $1,101,191 | 78.8% | $1,003,617 | 75.8% | | Automotive, lasers and other | $296,980 | 21.2% | $320,468 | 24.2% | | **Total** | **$1,398,171** | **100.0%** | **$1,324,085** | **100.0%** | Revenue by Geographic Region (Six Months Ended) | Geographic Region | % of Total Revenue (FY24) | % of Total Revenue (FY23) | | :--- | :--- | :--- | | North America | 35.8% | 50.8% | | Asia-Pacific and others | 57.3% | 40.5% | | Europe | 6.9% | 8.7% | - As of December 29, 2023, the company had **purchase obligations of $1.00 billion** and capital expenditure commitments of $13.1 million[114](index=114&type=chunk)[115](index=115&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue growth was driven by strong demand for optical communications products, offsetting declines in other sectors [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Q2 FY24 revenue grew 6.6% YoY, led by a 12.2% rise in optical communications, offsetting declines in other segments - Revenue from optical communications products **increased by $61.9 million (12.2%) YoY** for the quarter, primarily due to higher demand for data communication products for artificial intelligence applications[167](index=167&type=chunk) - Revenue from non-optical communications products **decreased by $17.8 million (11.0%) YoY** for the quarter, mainly due to a decline in revenues from automotive products[167](index=167&type=chunk) - Interest income for the quarter **increased by 234.8% YoY to $7.7 million**, driven by higher interest rates and a larger average cash and short-term investment balance[178](index=178&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a robust liquidity position, with cash from operations significantly increased by efficient inventory management Cash and Debt Position (in millions USD) | Metric | Dec 29, 2023 | Dec 30, 2022 | | :--- | :--- | :--- | | Cash, cash equivalents, and short-term investments | $740.6 | $527.6 | | Outstanding debt | $6.1 | $18.3 | - The increase in cash from operating activities was primarily driven by **efficient cash-favorable working capital changes**, mainly from inventory management[197](index=197&type=chunk) - The company believes its current cash, cash flow from operations, and available credit will be **sufficient to meet its needs for at least the next 12 months**[195](index=195&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from interest rates and foreign currency, primarily the U.S. dollar versus the Thai baht - The company's primary foreign currency risk is the **fluctuation of the Thai baht against the U.S. dollar**, as a majority of payroll and operating expenses are in Thai baht while revenues are in U.S. dollars[206](index=206&type=chunk) - To manage interest rate risk on its floating-rate debt, the company **uses interest rate swap agreements** to effectively convert the floating rate to a fixed rate[203](index=203&type=chunk) - A hypothetical **10% weakening in the U.S. dollar** against the Thai baht, RMB, and GBP would have resulted in a decrease in the company's net dollar position of approximately **$8.4 million** as of December 29, 2023[209](index=209&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes in internal control - Management, including the CEO and CFO, concluded that **disclosure controls and procedures were effective** as of the end of the period covered by the report[211](index=211&type=chunk) - **No changes in internal control over financial reporting** occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control[212](index=212&type=chunk) [PART II. OTHER INFORMATION](index=49&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material legal claims or actions are currently pending or threatened against it - As of the filing date, **Fabrinet is not involved in any material pending or threatened legal proceedings**[213](index=213&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) Key business risks include customer concentration, supply chain dependencies, and international financial exposures - The company depends on a small number of customers, with **three customers accounting for 57.0% of revenues** in the three months ended December 29, 2023[215](index=215&type=chunk) - The business is exposed to supply chain risk, as it **relies on single or limited-source suppliers** for critical materials, with semiconductor shortages being a particular concern[233](index=233&type=chunk) - Significant operational and financial risks stem from international operations, including **currency fluctuations (primarily Thai baht vs. USD)**, political conditions in Thailand, and U.S.-China trade tensions[245](index=245&type=chunk)[255](index=255&type=chunk)[254](index=254&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=71&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 38,239 ordinary shares for $6.4 million, with $93.6 million remaining under its repurchase authorization Share Repurchase Activity (Q2 FY24) | Period | Total Shares Purchased | Average Price Paid Per Share | Total Cost (in millions) | | :--- | :--- | :--- | :--- | | Q2 FY2024 | 38,239 | $166.61 | $6.4 | - As of December 29, 2023, the company had a remaining authorization to repurchase up to **$93.6 million of its ordinary shares**[311](index=311&type=chunk) [Item 5. Other Information](index=72&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the last fiscal quarter - **No director or officer adopted or terminated a Rule 10b5-1 trading plan** during the last fiscal quarter[313](index=313&type=chunk) [Item 6. Exhibits](index=72&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including required certifications and XBRL data files - Exhibits filed include **CEO/CFO certifications** pursuant to Sarbanes-Oxley Sections 302 and 906, and XBRL data files[314](index=314&type=chunk)

Trusted Manufacturing Partner of the World's Most Demanding OEMs Forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other factors including, but not limited to: changes in general economic conditions, either globally or in our markets, and the risk of recession or an economic downturn; continued disruption to our supply chain, which could increase our costs and affect our ability to procure parts and materials; less customer demand for our products and services ...