Highlights

  • Fiscal 2026 revenue rose 35.7% to $4.64 billion, with data center sales up 40.8% to $2.23 billion.
  • Net income climbed to $473.0 million from $332.5 million, while the effective tax rate rose to 14.8% on Pillar Two.
  • Four customers each contributed at least 10% of revenue and together accounted for 57.4% of fiscal 2026 sales.
  • Capital spending more than doubled to $298.9 million, and management expects fiscal 2027 outlays to increase again.

Fabrinet (NYSE:FN) shares were trading near their 52-week low at USD 357.81 on October 21, 2026, up 0.66%. The optical and electronic manufacturing services provider filed its annual report for the fiscal year ended June 26, 2026 on August 18, reporting higher revenue and profit, a larger capital spending program and a Chinese lawsuit accepted for retrial in July.

Fabrinet was incorporated in the Cayman Islands in August 1999 and began operations in January 2000. Its principal executive office address is c/o Walkers Corporate in George Town, Grand Cayman, while its principal manufacturing facilities are in Thailand. The company provides advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers, making optical communications products, industrial lasers, automotive components, medical devices and sensors. It reports revenue by three end markets and employed about 21,521 people at fiscal year-end. Its fiscal year ends on the last Friday in June.

Data Center and Communications Drive Revenue Growth

Revenue for fiscal 2026 was $4.64 billion, up $1.22 billion from $3.42 billion in fiscal 2025. Data center revenue, which includes data center interconnect and high-performance computing applications, grew 40.8% to $2.23 billion and made up 47.9% of sales. Communications infrastructure revenue rose 47.4% to $1.55 billion, and automotive, industrial and other markets grew 10.1% to $869.6 million. The company attributed the increase mainly to higher demand from key customers.

Gross profit rose 34.6% to $556.5 million, with gross margin at 12.0% against 12.1%. Selling, general and administrative expenses increased 6.9% to $93.5 million. Operating income was $462.9 million, up 42.7%, and operating margin improved to 10.0% from 9.4%.

Net income reached $473.0 million, compared with $332.5 million. Income tax expense rose to $82.1 million from $22.7 million, lifting the effective tax rate to 14.8% from 6.4%. Fabrinet said the increase mainly reflected top-up taxes under the OECD Pillar Two framework, including $57.4 million of current tax expense.

Customer Concentration, Litigation and Controls

The filing is explicit about reliance on a few customers. Cisco Systems, NVIDIA, Nokia and Amazon contributed 19.9%, 16.3%, 10.7% and 10.5% of fiscal 2026 revenue. In fiscal 2025, only NVIDIA and Cisco passed the 10% mark, at 27.6% and 18.2%. Fabrinet says that a reduction in orders from, or loss of, any one of them could materially harm results, and that supply agreements do not guarantee order volumes.

On legal matters, a 2024 complaint in Fuzhou, China sought RMB 400 million in alleged unjust enrichment from parties including Casix, a wholly-owned Fabrinet subsidiary. Two lower courts dismissed it on jurisdictional grounds, but the PRC Supreme Court ruled on July 30, 2026 to accept the case for retrial. That acceptance is not a ruling on the merits, and Fabrinet said it cannot quantify any potential liability. Management concluded that internal control over financial reporting was effective at fiscal year-end.

Cash, Capacity and Fiscal 2027 Expectations

Cash, cash equivalents and short-term investments totaled $875.1 million at June 26, 2026, compared with $934.2 million a year earlier, and the company had no outstanding debt. Operating cash flow fell to $256.7 million from $328.4 million, reflecting higher inventories to support demand in the next quarter and higher receivables. Capital expenditures reached $298.9 million versus $130.7 million.

Construction continues on a roughly 2.0 million square foot building at the Chonburi campus in Thailand, with an expected total cost of about $132.5 million and about $39.7 million remaining. Fabrinet did not repurchase shares in its fiscal fourth quarter. It bought 13,766 shares for $5.2 million during the year, and $169.0 million remained under its authorization.

Management expects fiscal 2027 capital expenditures to increase, citing the purchase of a manufacturing building in California, continued work at Pathum Thani and equipment for added capacity. It also expects fiscal 2027 SG&A expenses to rise. The annual report does not include numerical revenue or earnings guidance.