Fabrinet Q1 FY2025 earnings call

• First quarter revenue was $804 million, well above guidance range, up 17% year-over-year and 7% quarter-over-quarter. Operating margin was 10.7%. Non-GAAP EPS was $2.39.
• Optical Communications: Datacom revenue grew 36% year-over-year driven by AI applications. Telecom saw year-over-year revenue growth for the first time in six quarters. Products below 800 gig were strong.
• Non-Optical Communications: Accelerating revenue growth with automotive (EV charging infrastructure) and industrial laser strong.
• Facility: Making progress on Building 10 with plans to start construction by end of calendar year, increasing footprint by over 50%.

Optical Communications: Revenue was $626 million, accounting for 78% of total revenue. Datacom revenue was $329 million (53% of optical communications), up 36% year-over-year. Telecom revenue was $297 million (47% of optical communications), up 2% year-over-year. Revenue from products below 800 gig was $262 million, up 30% year-over-year. Revenue from 800 gig or faster was $257 million, up 19% year-over-year. Non-speed rated optical communications revenue was $107 million. Non-Optical Communications: Revenue was $178 million, up 17% year-over-year, driven by automotive and industrial laser where automotive revenue exceeded $100 million for the first time.

Second quarter 2025 expected revenue between $800 million and $820 million. EPS expected between $2.44 to $2.52 per diluted share. Anticipate operating margins consistent with recent performance despite pressure on gross margins from strengthening Thai Baht due to continued operating leverage.

Forward-looking statements subject to risks and uncertainties that could cause actual results to differ from expectations. Refer to SEC filings for risk factors.

Q: Karl Ackerman on Datacom and Auto growth A: Mix shift in Datacom between 800 and 400 gig, new Telecom business win with existing customer Q: Tim Savageaux on new business win A: New business win is a Telecom DCI product with existing customer Q: Samik Chatterjee on 800 gig capacity and Auto demand A: No capacity constraints for 800 gig, automotive growth is share gain, not inventory refill Q: George Notter on 1.6 terabit and components A: 1.6 ramp depends on Blackwell shipping, no component constraints seen Q: Ryan Koontz on Telecom and 800 ZR A: Telecom growth driven by ZR, 6 ZR customers, 800 ZR already shipping Q: Michael Genovese on systems business and 1.6 components A: Focus on optical interconnect for main Datacom customer, no major component constraints for 1.6