Fabrinet Earnings Show Data-Center Surge
Fabrinet earnings show a data-center led surge with record results and strong guidance, prompting buy-the-dip trader interest and analyst forecast upgrades
KEY TAKEAWAYS
- Q4 revenue rose 45% to $1.316 billion and non-GAAP EPS was $4.10.
- Data-center revenue was $669 million, about 51% of sales and fastest-growing segment.
- Management guided Q1 FY 2027 revenue to $1.375-$1.425 billion, implying about 43% y/y growth at midpoint.
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Fabrinet (NYSE: FN) reported record fourth-quarter and fiscal 2026 results in a press release on Aug. 17, 2026. Management expects continued year-over-year revenue and earnings growth into the first quarter of fiscal 2027, prompting analysts to raise forecasts.
Record Fourth-Quarter and Fiscal-Year Results
The company said fourth-quarter revenue reached $1.316 billion, up 45% year over year, with non-GAAP diluted earnings per share (EPS) of $4.10, exceeding both guidance and consensus estimates. GAAP net income was $139.3 million, with GAAP diluted EPS of $3.83. Non-GAAP net income totaled $149.1 million.
For fiscal 2026, Fabrinet reported revenue of $4.64 billion, a 36% increase from the prior year. GAAP net income was $473.0 million, with GAAP diluted EPS of $13.05. Non-GAAP diluted EPS was $14.09, with net income near $511.0 million. Full-year gross margins were about 12.0% GAAP and 12.2% non-GAAP. These results were detailed in the company’s Aug. 17 press release, furnished as Exhibit 99.1 to a Form 8-K filed Aug. 11.
Profitability, Cash Flow, and Balance Sheet
Despite slight pressure on gross margins, Fabrinet showed operating leverage. Non-GAAP gross margin for the quarter was 12.2%, down roughly 30 basis points year over year but up 10 basis points sequentially. Non-GAAP operating margin reached about 10.8%–10.9%, the highest in three years, supported by operating expenses near 1.2% of revenue.
Operating cash flow for the quarter was approximately $256.7 million. Free cash flow was a $37 million outflow in the quarter and $4 million for the full year. The company ended the period with $875.8 million in cash and equivalents and about $2.46 billion in shareholders’ equity.
Data Center Drives Growth and Outlook
Data center revenue rose to $669 million in the quarter, representing roughly 51% of total revenue. This segment grew 68% year over year and 13% sequentially, becoming Fabrinet’s largest end market. Management noted that data-center interconnect (DCI) products reached an annualized revenue run rate above $1 billion, highlighting the concentration of recent growth in AI and data-center infrastructure.
Communications infrastructure revenue totaled $413 million, about 31% of sales, up 40% year over year and 1% sequentially. Automotive, industrial, and other revenue reached $234 million, roughly 18% of total revenue, rising 8% year over year and 9% sequentially.
For the first quarter of fiscal 2027, Fabrinet projected revenue between $1.375 billion and $1.425 billion, implying about 43% year-over-year growth at the midpoint. Non-GAAP EPS guidance ranged from $4.10 to $4.25. Analysts have raised forecasts following the results, though debate continues over the durability of AI infrastructure demand driving the surge.
Upcoming Investor Event
Fabrinet’s investor relations calendar lists participation in Rosenblatt’s 6th Annual Age of AI Technology Summit on Aug. 18, 2026, at 1:00 p.m. ET.
