Key Takeaways:
- Revenue rose 45% to $1.316 billion, topping consensus of $1.27 billion.
- Non-GAAP EPS of $4.10 beat the $3.81 estimate by 7.6%.
- Data center sales hit 51% of revenue; Q1 guide implies 43% growth.
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Fabrinet beats Q4 estimates as data center revenue jumps 68%
Fabrinet reported fiscal fourth-quarter revenue of $1.316 billion, up 45 percent from a year earlier and above the top of its guidance range.
"What is most noticeable to us is that this performance did not come from any one product category or customer," Chief Executive Seamus Grady said on a call with analysts.
Non-GAAP earnings came in at $4.10 a share, beating the $3.81 consensus by 7.6 percent. Data center revenue rose 68 percent to $669 million, now 51 percent of total sales, while communications infrastructure climbed 40 percent to $413 million and automotive, industrial and other revenue gained 8 percent to $234 million.
Shares closed up 4.97 percent at $598.58, then fell 6.92 percent after hours to $557.14 as investors weighed the outlook. For the fiscal first quarter, Fabrinet guided revenue of $1.375 billion to $1.425 billion, implying 43 percent growth at the midpoint, and non-GAAP EPS of $4.10 to $4.25.
The quarter extended a run of 12 straight record revenue periods and six consecutive quarters of accelerating year-over-year growth. Gross margin was 12.2 percent, up 10 basis points sequentially but down 30 basis points from a year earlier, while operating margin reached 10.9 percent, the highest in three years. Full-year revenue rose 36 percent to $4.6 billion, with non-GAAP EPS up 39 percent to $14.09.
Customer concentration broadened, with Cisco at 20 percent of revenue, Nvidia at 16 percent, Nokia at 11 percent and Amazon at 11 percent. Management said data center demand remains "insatiable," with the DCI business running at an annualized rate above $1 billion and new transceiver programs ramping through fiscal 2027.
Fabrinet is expanding capacity to match demand, with Building 10 in Thailand on track for early 2027 and total potential revenue capacity rising to $12.5 billion to $14 billion over coming years. Free cash flow was negative $37 million in the quarter because of $92 million in capital spending and the $11 million Navanakorn acquisition.
The guidance signals management expects AI-driven demand to keep accelerating into fiscal 2027. Investors will watch the next earnings call in November for updates on transceiver ramps and margin trends as capacity additions come online.
This article is for informational purposes only and does not constitute investment advice.
