Security and Risk Management - The company has not experienced any material security breaches in its systems or third-party systems in the past three years[168]. - The company has established a cybersecurity risk management process overseen by its board of directors and an internal IT security committee[169]. Shareholder Information - As of June 28, 2024, the company has a total of 6 shareholders of record for its ordinary shares[176]. - The company intends to retain earnings for business use and does not currently plan to pay dividends on its ordinary shares[177]. Share Repurchase and Authorization - During the three months ended June 28, 2024, the company repurchased a total of 20,887 shares at an average price of $186.49, totaling approximately $39.5 million[179]. - The company has a remaining authorization to repurchase up to $60.5 million worth of its ordinary shares as of June 28, 2024[179]. Revenue and Market Performance - Revenues from customers outside North America increased from 52.0% in fiscal year 2023 to 63.5% in fiscal year 2024, driven by increased sales to a customer in Israel[189]. - The percentage of total revenues from Asia-Pacific increased to 57.1% in fiscal year 2024, up from 43.2% in fiscal year 2023[191]. - Total revenues for fiscal year 2024 are expected to be impacted by ongoing inventory corrections in the optical communications sector[188]. - Total revenues for the fiscal year ended June 28, 2024, reached $2,882.97 million, an increase of 8.96% from $2,645.24 million in the previous year[220]. - Revenues for fiscal year 2024 increased by $237.8 million, or 9.0%, to $2,882.97 million compared to fiscal year 2023[226]. - Optical communications revenues represented $2,289.0 million, or 79.4% of total revenues for fiscal year 2024, increasing by $280.7 million, or 14.0%[226]. - Non-optical communications revenues decreased by $42.9 million, or 6.7%, to $593.9 million, primarily due to inventory absorption in the automotive market[226]. Financial Performance - Gross profit for the same period was $356.12 million, reflecting a gross margin of approximately 12.35%[220]. - Operating income increased to $277.61 million, up from $251.70 million, representing a growth of 10.29% year-over-year[220]. - Net income for the fiscal year was $296.18 million, compared to $247.91 million in the prior year, marking a 19.43% increase[220]. - Interest income significantly rose to $33.20 million from $11.23 million, indicating a substantial increase in financial income[220]. - Selling, general, and administrative expenses were $78.48 million, slightly up from $77.67 million, indicating a modest increase in operational costs[220]. Cost and Expense Management - Employee costs, a major component of cost of revenues, are projected to rise due to increasing wages in Thailand and the PRC[194]. - Charges for discretionary merit-based bonuses to non-executive employees were $7.1 million in fiscal year 2024, up from $6.8 million in fiscal year 2023[197]. - SG&A expenses are expected to increase in fiscal year 2025 compared to fiscal year 2024, primarily due to rising compensation-related expenses[198]. - The company expects an increase in selling, general and administrative (SG&A) expenses for fiscal year 2025 compared to fiscal year 2024[182]. Cash Flow and Investments - Cash, cash equivalents, and short-term investments increased to $858.6 million as of June 28, 2024, up from $550.5 million as of June 30, 2023[240]. - Cash provided by operating activities for fiscal year 2024 was $413.1 million, compared to $213.3 million for fiscal year 2023[244]. - The company had no outstanding debt as of June 28, 2024, down from $12.2 million as of June 30, 2023[240]. - The company reported a foreign exchange gain of $0.38 million, contrasting with a loss of $1.21 million in the previous year[220]. Taxation - The effective income tax rate for the company was approximately 4.87% for the fiscal year ended June 28, 2024[220]. - The corporate income tax rate for the Thai subsidiary is currently 20%, with various tax incentives available until 2031[210]. - A full valuation allowance of $2.7 million for deferred tax assets was set up for the subsidiary in Israel due to expected net operating losses[218]. Assets and Liabilities - Total current assets increased to $2,012.7 million as of June 28, 2024, up from $1,652.5 million as of June 30, 2023, representing a growth of approximately 21.8%[277]. - Total liabilities rose to $592.8 million as of June 28, 2024, compared to $511.0 million as of June 30, 2023, indicating an increase of about 15.9%[277]. - Shareholders' equity increased to $1,745.7 million as of June 28, 2024, up from $1,468.7 million as of June 30, 2023, marking a growth of approximately 18.9%[277]. Inventory and Receivables - Trade accounts receivable increased to $592.5 million as of June 28, 2024, from $531.8 million as of June 30, 2023, reflecting a growth of approximately 11.4%[277]. - Inventories decreased to $463.2 million as of June 28, 2024, down from $519.6 million as of June 30, 2023, indicating a decline of about 10.8%[277]. Derivatives and Foreign Currency - The company had $135.0 million of foreign currency forward contracts outstanding on Thai baht payables as of June 28, 2024[203]. - The company recognized a derivatives gain of $3,007,000 from foreign currency forward contracts in other comprehensive income for the year ended June 28, 2024[352]. - The unrealized gain from changes in fair value of foreign currency forward and option contracts not designated for hedge accounting was $0.7 million for the year ended June 28, 2024[349]. Accounting and Reporting - The critical audit matter identified was related to revenue recognition, specifically the evaluation of terms and conditions in contracts[270]. - The Company recognizes revenue primarily from product assembly and customized optics fabrication, following a five-step revenue recognition process[310]. - The Company is currently assessing the impact of new accounting standards issued in November and December 2023, which will be effective in fiscal years 2025 and 2026 respectively[324].

Financial Data and Key Metrics Changes - Fourth quarter revenue reached $753 million, exceeding guidance and reflecting a 15% year-over-year increase and a 3% increase from Q3 [4][8] - Full year revenue totaled $2.9 billion, a 9% increase from fiscal year 2023 [4][9] - Non-GAAP EPS for Q4 was $2.41, surpassing guidance, while full year non-GAAP EPS reached a record $8.88, up 16% year-over-year [4][14] Business Line Data and Key Metrics Changes - Optical communications revenue was $596 million in Q4, accounting for 79% of total revenue, with datacom revenue at $350 million, up 63% year-over-year [9][10] - Telecom revenue was $282 million, down approximately 1% from Q3, but the decline was smaller than expected due to growth in data center interconnect products [9][10] - Non-optical communications revenue grew to $157 million, up 2% year-over-year and 12% sequentially, driven by automotive revenue which increased 17% sequentially [11][12] Market Data and Key Metrics Changes - Datacom revenue grew over 120% for the year, while telecom revenue declined more than 20% due to inventory digestion in the telecom industry [4][5] - Revenue from products rated at 800 gig and faster was $259 million, up 54% year-over-year, indicating strong demand trends [10][11] - Six customers are currently utilizing ZR optics for DCI applications, contributing to growth in the telecom segment [31] Company Strategy and Development Direction - The company plans to break ground on Building 10 at its Chonburi campus, a 2 million square foot facility, to enhance manufacturing capacity [7][8] - The decision to expand is based on overall business conviction, not limited to any single segment, with expected revenue capacity from Building 10 estimated at $2.4 billion [22][23] - The company is optimistic about future growth in datacom and is seeing signs of recovery in telecom, with new system program wins expected to contribute to revenue in fiscal 2025 [6][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued revenue growth across all major product categories in Q1 of fiscal 2025, with guidance for revenue between $760 million and $780 million [16][17] - The company anticipates that operational efficiencies will offset temporary downward pressure on margins due to seasonal merit increases [17] - Management noted that while telecom revenue has been soft, there are indications of recovery, and datacom growth appears sustainable [26][29] Other Important Information - The company repurchased approximately 21,000 shares in Q4 at an average price of $170 per share, with a total cash outlay of $3.5 million [15] - The company maintains a strong balance sheet with cash and short-term investments of $859 million, up $65 million from Q3 [14] Q&A Session Summary Question: Timing around 1.6T and demand for 400 gig and 800 gig - Management is working with customers on 1.6T but believes 800 gig will remain relevant for a long time, with strong demand expected [19][20] Question: Conviction for Building 10 expansion - The decision to expand is based on overall business confidence, with significant upside potential and minimal downside risk [22][23] Question: Customer base for 800 gig transceivers - The company is seeing strong demand from NVIDIA and is pursuing additional customers in the datacom space [25][26] Question: Growth of coherent ZR optics - The telecom business is stabilizing, with growth in DCI driven by ZR optics [31][43] Question: Ciena win and its impact - The Ciena win is expected to ramp up in fiscal 2026, with early contributions anticipated in fiscal 2025 [52]

Fabrinet (FN) came out with quarterly earnings of $2.41 per share, beating the Zacks Consensus Estimate of $2.25 per share. This compares to earnings of $1.86 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 7.11%. A quarter ago, it was expected that this company that assembles optical, electro-mechanical and electronic devices for other companies would post earnings of $2.12 per share when it actually produced earnings of $2.3 ...

What: Fabrinet Fourth Quarter and Fiscal Year 2024 Financial Results Call When: Monday, August 19, 2024 Time: 5:00 p.m. EDT Live Call & Replay: https://investor.fabrinet.com/events-and-presentations/events Fabrinet is a leading provider of advanced optical packaging and precision optical, electro-mechanical, and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and subsystems, automotive components, medical devices, i ...

Core Viewpoint - Fabrinet (FN) is positioned well to continue its trend of beating earnings estimates in the upcoming quarterly report, supported by a solid history of performance in the Zacks Electronics - Miscellaneous Components industry [1]. Summary by Sections Earnings Performance - Fabrinet has consistently beaten earnings estimates, with an average surprise of 7.35% over the last two quarters [2]. - In the last reported quarter, Fabrinet achieved earnings of $2.39 per share, exceeding the Zacks Consensus Estimate of $2.12 per share, resulting in a surprise of 12.74% [3]. - For the previous quarter, the company was expected to post earnings of $2.04 per share but delivered $2.08 per share, yielding a surprise of 1.96% [3]. Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for Fabrinet, with a positive Zacks Earnings ESP (Expected Surprise Prediction), indicating a strong likelihood of an earnings beat [4]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [5]. Analyst Sentiment - Fabrinet currently has an Earnings ESP of +0.78%, suggesting that analysts have recently become more optimistic about the company's earnings prospects [7]. - The combination of a positive Earnings ESP and a Zacks Rank of 3 indicates a potential for another earnings beat [7]. Importance of Earnings ESP - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [6]. - It is crucial for investors to check a company's Earnings ESP before quarterly releases to enhance the likelihood of successful investment decisions [8].

Market Overview - Major indices are climbing despite concerns over inflation, high interest rates, and geopolitical tensions, leading investors to seek stocks that can benefit from the ongoing equity surge [1][3] - The S&P 500 Index has experienced 27 bull markets from 1928 to 2023, with an average gain of nearly 115% over 2.7 years, and recently re-entered bull market territory in June 2023 [2] Eli Lilly (LLY) - Eli Lilly reported a 26% increase in revenue for Q1 2024, driven by new product launches like Mounjaro and Zepbound [6] - The company's gross margin rose from 78.4% in Q1 2023 to 82.5% in Q1 2024, with operating income growing by 63% and earnings per share increasing by 59% [7] - Eli Lilly raised its full-year 2024 revenue guidance to between $42.4 billion and $43.6 billion, indicating potential for further margin expansion [7][8] Fabrinet (FN) - Fabrinet's market cap is $8.4 billion, with Q3 fiscal year 2024 revenue reported at $731.5 million, up from $665.3 million year-over-year [11] - The company saw a 150% year-over-year growth in datacom revenue, reflecting strong performance in optical communications [12] - FN stock has returned 22% year-to-date, trading at 26.2 times forward earnings and 3.1 times sales, with potential for continued growth [13] Vanguard Growth ETF (VUG) - The Vanguard Growth ETF provides exposure to large-cap U.S. growth stocks, with over half of its holdings in technology [15][17] - Since January, VUG has gained over 11%, outperforming the Nasdaq 100 index (9%), S&P 500 (10%), and Dow Jones Industrial Average (5%) [19] - The fund trades at 38 times trailing earnings and 10 times book value, with a competitive expense ratio of 0.04% and a modest 0.5% dividend yield [19]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________ FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 29, 2024 OR ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from__________to__________ Commission File Number: 001-34775 FABRINET Ordinary Shares, $0.01 par value FN New York S ...

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. ...