Fabrinet(FN) - 2025 Q4 - Annual Results

Financial Performance Summary Fabrinet's financial performance for fiscal year 2025 and its fourth quarter demonstrated strong growth across revenue, net income, and earnings per share, with positive guidance for Q1 FY2026 Fourth Quarter Fiscal Year 2025 Performance Fabrinet reported a record-breaking fourth quarter for fiscal year 2025, with revenue reaching $909.7 million, a significant increase from the previous year, and both GAAP and Non-GAAP net income and earnings per share saw substantial growth, exceeding company guidance and setting new all-time highs - CEO Seamus Grady highlighted the exceptional fourth quarter, which capped a remarkable year with strong momentum and record revenue of $910 million, exceeding guidance[2] Q4 FY2025 vs. Q4 FY2024 Financial Results | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $909.7 million | $753.3 million | +20.8% | | GAAP Net Income | $87.2 million | $81.1 million | +7.5% | | GAAP EPS (diluted) | $2.42 | $2.22 | +9.0% | | Non-GAAP Net Income | $95.6 million | $88.0 million | +8.6% | | Non-GAAP EPS (diluted) | $2.65 | $2.41 | +10.0% | Fiscal Year 2025 Performance For the full fiscal year 2025, Fabrinet achieved record revenue of $3.42 billion, a 19% increase year-over-year, with net income and earnings per share on both a GAAP and Non-GAAP basis demonstrating strong growth compared to fiscal year 2024 - Full fiscal year 2025 revenue grew by 19% year-over-year, reaching a record $3.4 billion[2] FY2025 vs. FY2024 Financial Results | Metric | FY2025 | FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $3.42 billion | $2.88 billion | +18.8% | | GAAP Net Income | $332.5 million | $296.2 million | +12.3% | | GAAP EPS (diluted) | $9.17 | $8.10 | +13.2% | | Non-GAAP Net Income | $368.8 million | $324.6 million | +13.6% | | Non-GAAP EPS (diluted) | $10.17 | $8.88 | +14.5% | Business Outlook (Q1 FY2026) Fabrinet issued strong guidance for the first quarter of fiscal year 2026, projecting continued growth with expected revenue between $910 million and $950 million and Non-GAAP earnings per diluted share anticipated in the range of $2.75 to $2.90 Q1 FY2026 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $910 million - $950 million | | GAAP EPS (diluted) | $2.48 - $2.63 | | Non-GAAP EPS (diluted) | $2.75 - $2.90 | | Fully Diluted Shares | ~36.1 million | - The company expresses optimism that favorable business trends will continue into the first quarter of fiscal 2026 and beyond[2][9] Consolidated Financial Statements Fabrinet's consolidated financial statements for fiscal year 2025 reflect significant asset growth driven by receivables and inventories, increased liabilities, and a shift in cash flow dynamics Consolidated Balance Sheets As of June 27, 2025, Fabrinet's balance sheet shows significant growth in total assets to $2.83 billion from $2.34 billion in the prior year, driven by increases in cash and short-term investments, trade accounts receivable, and inventories, while total liabilities also increased, primarily due to a rise in trade accounts payable, and shareholders' equity grew to $1.98 billion Key Balance Sheet Items (as of June 27, 2025 vs. June 28, 2024) | Account | June 27, 2025 | June 28, 2024 | | :--- | :--- | :--- | | Total Current Assets | $2,428.8 million | $2,012.7 million | | Total Assets | $2,831.4 million | $2,338.5 million | | Total Current Liabilities | $809.8 million | $557.9 million | | Total Liabilities | $849.6 million | $592.8 million | | Total Shareholders' Equity | $1,981.8 million | $1,745.7 million | - Key drivers of asset growth include a significant increase in Trade accounts receivable (to $758.9 million from $592.5 million) and Inventories (to $581.0 million from $463.2 million)[16] Consolidated Statements of Operations For the fiscal year ended June 27, 2025, Fabrinet's revenues increased by 18.6% to $3.42 billion, gross profit grew to $413.3 million, although gross margin slightly decreased to 12.1% from 12.4%, operating income rose to $324.4 million, and net income increased to $332.5 million, resulting in a diluted EPS of $9.17 FY2025 vs. FY2024 Statement of Operations Highlights | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Revenues | $3,419.3 million | $2,883.0 million | | Gross Profit | $413.3 million | $356.1 million | | Operating Income | $324.4 million | $277.6 million | | Net Income | $332.5 million | $296.2 million | | Diluted EPS | $9.17 | $8.10 | - Gross margin for FY2025 was 12.1%, a slight decrease from 12.4% in FY2024, while operating margin was 9.5%, slightly down from 9.6% in the prior year[17] Consolidated Statements of Cash Flows For fiscal year 2025, net cash provided by operating activities was $328.4 million, a decrease from $413.1 million in the prior year, primarily due to significant increases in trade accounts receivable and inventories, while net cash used in investing activities increased to $286.3 million due to higher purchases of property, plant, and equipment, and financing activities used $147.0 million, largely for share repurchases, resulting in a net decrease in cash and cash equivalents FY2025 vs. FY2024 Cash Flow Summary | Cash Flow Activity | FY2025 | FY2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $328.4 million | $413.1 million | | Net Cash used in Investing Activities | ($286.3 million) | ($169.8 million) | | Net Cash used in Financing Activities | ($147.0 million) | ($64.9 million) | | Net (Decrease) Increase in Cash | ($104.9 million) | $178.5 million | | Cash at End of Period | $306.4 million | $409.9 million | - The decrease in operating cash flow was significantly impacted by changes in working capital, including a $165.7 million increase in trade accounts receivable and a $117.8 million increase in inventories[19] - The company significantly increased its repurchase of ordinary shares to $125.7 million in FY2025, up from $39.5 million in FY2024[19] Reconciliation of GAAP to Non-GAAP Measures Fabrinet provides Non-GAAP financial measures to offer a clearer view of underlying operational performance by excluding specific non-recurring or non-cash items, aiding in historical comparisons and management decision-making Non-GAAP Financial Measures Explanation Fabrinet provides Non-GAAP financial measures to supplement its GAAP results, believing they offer useful information for comparing historical performance and competitor results, and these measures exclude items such as share-based compensation, restructuring costs, and certain legal expenses to provide a clearer view of underlying operations - Non-GAAP measures are used to evaluate company performance, facilitate competitor comparisons, and for management's financial and operational decision-making[10] - Key exclusions from Non-GAAP calculations include share-based compensation, severance payments, restructuring costs, legal and litigation costs, and amortization of deferred debt issuance costs[11][12] Reconciliation of Key Metrics For fiscal year 2025, Fabrinet's Non-GAAP operating profit was $360.7 million (10.5% margin) compared to a GAAP operating profit of $324.4 million (9.5% margin), with Non-GAAP net income reaching $368.8 million, or $10.17 per diluted share, after adjusting for $36.3 million in expenses, primarily share-based compensation, and Non-GAAP free cash flow for the year was $207.3 million FY2025 GAAP vs. Non-GAAP Reconciliation Summary | Metric | GAAP | Non-GAAP | Key Adjustments | | :--- | :--- | :--- | :--- | | Gross Profit | $413.3 million | $423.8 million | +$10.5 million Share-based comp. | | Operating Profit | $324.4 million | $360.7 million | +$33.0 million Share-based comp. | | Net Income | $332.5 million | $368.8 million | +$36.3 million various expenses | | Diluted EPS | $9.17 | $10.17 | +$1.00 | FY2025 Free Cash Flow Calculation | Metric | Amount | | :--- | :--- | | Net cash provided by operating activities | $328.4 million | | Less: Purchase of property, plant and equipment | ($121.1 million) | | Non-GAAP free cash flow | $207.3 million | Supplementary Information This section provides essential background on Fabrinet's business, outlines important forward-looking statement disclaimers, and details information for the upcoming financial results conference call About Fabrinet Fabrinet is a leading provider of advanced optical packaging and manufacturing services for original equipment manufacturers, specializing in complex products such as optical communication components, automotive components, medical devices, and industrial lasers, offering a wide range of capabilities from process design to final testing, and operates facilities in Thailand, the USA, China, and Israel - Fabrinet provides advanced optical packaging and precision manufacturing services for complex products[8] - Key markets served include optical communication, automotive, medical devices, industrial lasers, and sensors[8] Forward-Looking Statements This report contains forward-looking statements, including the business outlook for the first quarter of fiscal 2026 and optimism about future business trends, which are subject to various risks and uncertainties, such as changes in economic conditions, supply chain disruptions, and customer demand, that could cause actual results to differ materially, and the company disclaims any obligation to update these statements - Forward-looking statements include the Q1 FY2026 financial guidance and optimism about continuing positive business trends[9] - Key risks that could affect results include global economic conditions, supply chain disruptions, customer demand fluctuations, and market competition[9] Conference Call Information Fabrinet will host a conference call to discuss its fourth quarter and fiscal year 2025 financial results on August 18, 2025, at 5:00 p.m. ET, with a live webcast and replay available on the company's investor relations website Conference Call Details | Item | Detail | | :--- | :--- | | Event | Q4 FY2025 Financial Results Call | | Date | August 18, 2025 | | Time | 5:00 p.m. ET | | Access | https://investor.fabrinet.com/events-and-presentations/events |