Fabrinet(US:FN)2022-08-16 02:15Financial Data and Key Metrics Changes - The company reported revenue of $587.9 million for Q4 2022, a 15% increase year-over-year and a 4% increase from Q3 2022 [6][13] - Non-GAAP earnings per share reached a record $1.68, which is 28% higher than the previous year and 12% higher than Q3 2022 [13][19] - For the full fiscal year 2022, revenue was $2.26 billion, up 20% from the prior year, with non-GAAP earnings per share increasing by 31% to $6.13 [7][19] Business Line Data and Key Metrics Changes - Optical communications revenue was $464.7 million, up 20% year-over-year and 6% sequentially, with Telecom revenue at a record $371.9 million [15] - Datacom revenue increased to $92.8 million, reflecting a 20% year-over-year and 14% sequential growth [15] - Non-optical communications revenue was $123.2 million, with automotive revenue reaching a record $56 million, up 5% from the previous quarter [16] Market Data and Key Metrics Changes - The company continues to face supply chain constraints affecting all end markets, but has seen some improvements in supply availability for certain parts [9][54] - Demand for services remains strong across all markets, with particular strength in Telecom and Datacom segments [11][30] Company Strategy and Development Direction - The company is expanding its manufacturing capacity with the opening of a new one million square foot facility, Building 9, which increases its global footprint by approximately 50% [10] - The long-term strategy focuses on driving top-line growth while expanding operating margins, with a new target for non-GAAP operating margins set above 10% [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth prospects despite ongoing supply chain challenges, indicating strong demand across key markets [11][24] - The company anticipates revenue for Q1 2023 to be between $620 million and $640 million, with expectations of slightly lower gross and operating margins due to annual merit increases [23] Other Important Information - The company repurchased approximately 353,000 shares at an average price of $88.67 per share during the quarter, reflecting a commitment to return value to shareholders [21] - Cash, restricted cash, and investments totaled $478.5 million at the end of Q4 2022, down from the previous quarter [20] Q&A Session Summary Question: Can you discuss the structure of your hedges and the impact of exchange rates? - The company maintains a layered hedge program, fully hedged for the next quarter and gradually decreasing thereafter, with a gross margin tailwind from exchange rates [27] Question: What are your growth expectations for FY 2023? - Management is guiding one quarter at a time, noting strong demand but limited by component supply, with optimism about the overall demand environment [30] Question: Can you provide insights on the systems business and its growth? - The company is pursuing new systems business but faces challenges due to the current supply environment, making it difficult to predict timing for new wins [41] Question: How is the 400 gig segment performing? - The 400ZR segment is ramping up and represents a high single-digit portion of revenue, with growth expected despite temporary supply-related declines in other areas [60] Question: Are component shortages concentrated in specific segments? - Component shortages are broadly distributed across all segments, primarily affecting standard commodity-type electronic components [54]