Fourth quarter and fiscal year 2026
Filed Aug 17, 2026Record fourth-quarter revenue of $1.316 billion exceeded guidance range; fiscal 2026 revenue increased 36% to $4.6 billion.
Fourth-quarter revenue increased 45% year over year to a record $1,315.8 million, while GAAP diluted EPS rose to $3.83 and non-GAAP diluted EPS reached $4.10. The company guided first-quarter fiscal 2027 revenue to $1.375 billion to $1.425 billion.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $1,315.8 million | – | 45% |
| Gross profitGAAP | $158.1 million | – | – |
| Gross marginGAAP | 12.0% | – | – |
| Gross profitnon-GAAP | $160.8 million | – | – |
| Gross marginnon-GAAP | 12.2% | – | – |
| Selling, general and administrative expensesGAAP | $23.7 million | – | – |
| Operating incomeGAAP | $134.2 million | – | – |
| Operating marginGAAP | 10.2% | – | – |
| Operating profitnon-GAAP | $143.4 million | – | – |
| Operating marginnon-GAAP | 10.9% | – | – |
| Income tax expenseGAAP | $60.5 million | – | – |
| Net incomeGAAP | $139.3 million | – | – |
| Diluted earnings per shareGAAP | $3.83 | – | – |
| Net incomenon-GAAP | $149.1 million | – | – |
| Diluted earnings per sharenon-GAAP | $4.10 | – | – |
| Net cash provided by operating activitiesGAAP | $55.0 million | – | – |
| Free cash flownon-GAAP | $(36.9) million | – | – |
| Fiscal year revenueGAAP | $4.64 billion | – | 36% |
| Fiscal year gross marginGAAP | 12.0% | – | – |
| Fiscal year non-GAAP gross marginnon-GAAP | 12.2% | – | – |
| Fiscal year operating incomeGAAP | $462.9 million | – | – |
| Fiscal year operating marginGAAP | 10.0% | – | – |
| Fiscal year non-GAAP operating profitnon-GAAP | $500.1 million | – | – |
| Fiscal year non-GAAP operating marginnon-GAAP | 10.8% | – | – |
| Fiscal year net incomeGAAP | $473.0 million | – | – |
| Fiscal year diluted earnings per shareGAAP | $13.05 | – | – |
| Fiscal year non-GAAP net incomenon-GAAP | $510.9 million | – | – |
| Fiscal year non-GAAP diluted earnings per sharenon-GAAP | $14.09 | – | – |
| Fiscal year net cash provided by operating activitiesGAAP | $256.7 million | – | – |
| Fiscal year free cash flownon-GAAP | $4.2 million | – | – |
First fiscal quarter ending September 25, 2026 outlook
- Revenue$1.375 billion to $1.425 billion
- NoteGAAP net income per diluted share of $3.39 to $3.54
- NoteNon-GAAP net income per diluted share of $4.10 to $4.25
- NoteApproximately 36.3 million fully diluted shares outstanding
- NoteNon-GAAP net income per diluted share excludes share-based compensation expenses and certain non-recurring items.
- NoteGuidance reconciliation includes $0.12 related to cost of revenues share-based compensation expenses, $0.19 related to selling, general and administrative expenses share-based compensation expenses, and $0.40 tax provision related to Pillar Two, for total reconciling items of $0.71 per diluted share.
Capital returns
- Repurchase of ordinary shares was $5.2 million during fiscal year 2026, compared to $125.7 million during fiscal year 2025.
- Withholding tax related to net share settlement of restricted share units was $25.5 million during fiscal year 2026, compared to $21.3 million during fiscal year 2025.
- No dividends were reported in the filing.
What drove it
- Management cited excellent execution and multiple significant growth drivers across the business.
- The company described growth trends across data center, communications infrastructure, automotive, industrial and other markets in its forward-looking statements.
- Fourth-quarter revenue reached a record $1.316 billion and exceeded the company's guidance range.
- GAAP operating margin was 10.2%, compared to 9.8% in the prior-year quarter; non-GAAP operating margin was 10.9%, compared to 10.7%.
- Other income was $57.4 million in the fourth quarter, including a $56.7 million gain on non-marketable equity securities; the non-GAAP reconciliation excluded this revaluation.
- The fourth-quarter GAAP tax provision included a $57.4 million tax provision related to Pillar Two, which was excluded from non-GAAP results.
Concerns
- GAAP gross margin was 12.0% in the fourth quarter, compared to 12.2% in the prior-year quarter. Non-GAAP gross margin was 12.2%, compared to 12.5%.
- Fourth-quarter free cash flow was $(36.9) million, compared to $4.7 million in the prior-year quarter, as capital expenditures were $91.9 million.
- Fiscal 2026 free cash flow was $4.2 million, compared to $207.3 million in fiscal year 2025, while capital expenditures rose to $252.5 million from $121.1 million.
- Inventories increased to $1.021 billion from $581.0 million, and trade accounts receivable increased to $1.018 billion from $758.9 million.
- The company identified risks including supply-chain disruption, customer demand below forecast, reliance on a small number of customers and suppliers, competition, and challenges managing operating costs across multiple countries.
What to watch
- Delivery against first-quarter fiscal 2027 revenue guidance of $1.375 billion to $1.425 billion.
- First-quarter GAAP diluted EPS guidance of $3.39 to $3.54 and non-GAAP diluted EPS guidance of $4.10 to $4.25.
- Gross-margin trajectory following fourth-quarter GAAP gross margin of 12.0% and non-GAAP gross margin of 12.2%.
- Capital-expenditure levels and free-cash-flow conversion after fiscal 2026 capital expenditures of $252.5 million and free cash flow of $4.2 million.
- Inventory and receivables levels, which were $1.021 billion and $1.018 billion, respectively, at June 26, 2026.
- The impact of the Pillar Two tax provision, which was $57.4 million in the fourth quarter and fiscal year 2026.
Balance sheet and cash flow
- Cash and cash equivalents were $346.7 million as of June 26, 2026, compared to $306.4 million as of June 27, 2025.
- Short-term investments were $528.3 million as of June 26, 2026, compared to $627.8 million as of June 27, 2025.
- Long-term restricted cash was $704 thousand as of June 26, 2026.
- Trade accounts receivable were $1.018 billion as of June 26, 2026, compared to $758.9 million as of June 27, 2025.
- Inventories were $1.021 billion as of June 26, 2026, compared to $581.0 million as of June 27, 2025.
- Property, plant and equipment, net was $615.1 million as of June 26, 2026, compared to $380.6 million as of June 27, 2025.
- Total liabilities were $1.457 billion as of June 26, 2026, compared to $849.6 million as of June 27, 2025.
- The filing reported interest expense of $84 thousand for fiscal year 2026 but did not provide a debt balance.
- Fiscal 2026 capital expenditures, reported as purchases of property, plant and equipment, were $252.5 million, compared to $121.1 million in fiscal year 2025.
- Fourth-quarter capital expenditures were $91.9 million, compared to $50.4 million in the prior-year quarter.
- Fiscal 2026 net cash used in investing activities was $(183.6) million, compared to $(286.3) million in fiscal year 2025.
- Cash, cash equivalents and restricted cash at the end of fiscal year 2026 was $347.4 million, compared to $306.4 million at the end of fiscal year 2025.
Analysis
Fabrinet reported record fourth-quarter revenue of $1,315.8 million, up 45% from $909.7 million a year earlier, and management stated that the result exceeded its guidance range. Fiscal 2026 revenue was $4.64 billion, compared with $3.42 billion in fiscal 2025, with the release characterizing the increase as 36%. The filing does not provide revenue by operating segment, customer, product category, or end market, limiting direct assessment of the sources of reported growth.
Profitability expanded at the operating level despite modest gross-margin compression. Fourth-quarter GAAP operating income was $134.2 million, compared with $89.1 million, and GAAP operating margin was 10.2%, compared with 9.8%. Non-GAAP operating profit was $143.4 million and non-GAAP operating margin was 10.9%, compared with $97.5 million and 10.7%, respectively. However, GAAP gross margin was 12.0% versus 12.2%, while non-GAAP gross margin was 12.2% versus 12.5%.
GAAP net income was $139.3 million, or $3.83 per diluted share, compared with $87.2 million, or $2.42 per diluted share. Non-GAAP net income was $149.1 million, or $4.10 per diluted share, compared with $95.6 million, or $2.65 per diluted share. The GAAP result included $57.4 million of other income associated with non-marketable equity securities revaluation and a $57.4 million Pillar Two tax provision. Both items were excluded in the company’s non-GAAP reconciliation, along with share-based compensation, severance, legal and litigation costs, and restructuring-related costs.
Cash conversion was constrained by investment and working-capital balances. Fourth-quarter operating cash flow was $55.0 million, while $91.9 million of property, plant and equipment purchases produced non-GAAP free cash flow of $(36.9) million. For the fiscal year, operating cash flow was $256.7 million and free cash flow was $4.2 million after $252.5 million of capital expenditures. At June 26, 2026, inventories were $1.021 billion and receivables were $1.018 billion; cash and cash equivalents were $346.7 million and short-term investments were $528.3 million.
The fiscal 2027 opening guide calls for first-quarter revenue of $1.375 billion to $1.425 billion, GAAP diluted EPS of $3.39 to $3.54, and non-GAAP diluted EPS of $4.10 to $4.25. The EPS outlook is based on approximately 36.3 million fully diluted shares outstanding. With no prior-quarter outlook included in the supplied documents, the filing supports no direct comparison of reported fourth-quarter performance against prior numeric guidance beyond management’s statement that revenue exceeded its guidance range.
Management, verbatim
Our fourth quarter was exceptional, capping off a remarkable year of accelerating growth and strong momentum.
Seamus Grady, Chief Executive Officer
We achieved record quarterly revenue of $1.316 billion, exceeding our guidance range, and increasing 45% from a year ago.
Seamus Grady, Chief Executive Officer
As we look to fiscal year 2027, we remain very optimistic about the strength of our business and durability in the growth trends we are seeing, as multiple, significant growth drivers across our business contribute to our success.
Seamus Grady, Chief Executive Officer
Not in the filing
stated, not guessed- Previous-quarter outlook was not provided; therefore, numeric comparison of actual fourth-quarter results with prior guidance is unavailable.
- Revenue by segment, product category, customer, geography, and end market was not provided.
- Prior-quarter comparative financial results were not provided.
- Gross-margin, operating-expense, and tax-rate guidance for the first quarter of fiscal 2027 was not provided.
- A debt balance and a detailed debt schedule were not provided.
- Dividend amount, if any, was not provided.
- Management commentary from a named chief financial officer was not provided.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.