Fabrinet's Q4 Results and Q1 Outlook Beat Estimates, Datacom Business to Slow Down Amid Supply Chain Constraints.

Fabrinet's Q4 results and FY1Q outlook exceeded estimates, but shares fell 11% premarket as Needham analysts noted a slowdown in Datacom business due to supply chain constraints. The firm maintained its Buy rating and $350 price target.

Fabrinet, a leading provider of advanced optical packaging and precision optical, electro-mechanical, and electronic manufacturing services, reported its fourth-quarter (Q4) financial results on July 2, 2025. The company exceeded analysts' expectations with record revenues and earnings, but shares fell 11% premarket as concerns over supply chain constraints in its data communication business were raised [1].

The Q4 results showed record quarterly revenue of $910 million, exceeding the company's guidance range. Non-GAAP net income per diluted share reached a new all-time high of $2.65. For the full fiscal year 2025, Fabrinet achieved record revenue of $3.4 billion, a 19% increase year-over-year. The company's guidance for the first fiscal quarter (Q1) 2026 also exceeded expectations, with revenue expected to be in the range of $910 million to $950 million [2].

However, Fabrinet's shares fell 11% premarket after Needham analysts noted a slowdown in the data communication business segment due to supply chain constraints. The company's Chief Financial Officer, Csaba Sverha, cited supply constraints for critical components as the cause of the anticipated drop in Datacom revenue in Q1. Sverha stated that the company is working with customers and suppliers to resolve these issues, which are expected to be temporary.

Despite the supply chain concerns, Fabrinet maintained its Buy rating and $350 price target, according to Needham analysts. The analysts noted that Fabrinet's strong Q4 results and guidance for Q1 2026 indicate continued growth in the company's optical communications, automotive, and industrial lasers and sensors markets.

References:
[1] https://sherwood.news/markets/fabrinet-tanks-after-warning-of-supply-chain-issues-in-its-nvidia-linked/
[2] https://www.ainvest.com/news/fabrinet-q4-results-q1-outlook-beat-estimates-datacom-business-slow-supply-chain-constraints-2508-56/