Fabrinet 2025 Q4 Earnings Strong Performance as Net Income Grows 7.6%

Fabrinet (FN) reported its fiscal 2025 Q4 earnings on Aug 19, 2025. The results beat expectations, with the company delivering robust top-line and bottom-line growth. Fabrinet also raised guidance for the upcoming quarter, indicating confidence in sustaining its momentum.

Fabrinet’s total revenue increased by 20.8% year-over-year to $909.69 million in Q4 2025, compared to $753.26 million in the same period of 2024. The earnings performance was equally impressive as the company’s EPS rose 8.8% to $2.44 in 2025 Q4 from $2.24 in 2024 Q4. Net income also saw a 7.6% increase, reaching $87.21 million, up from $81.07 million in the prior year. This marks 19 consecutive years of profitability for Fabrinet, underscoring its stable and resilient business operations.

Despite the strong earnings, the stock price of Fabrinet declined during the reporting period. The stock edged down 1.22% during the latest trading day, tumbled 18.12% over the most recent full trading week, and fell 8.27% month-to-date.

The post-earnings trading strategy of buying Fabrinet shares following a quarterly revenue increase and holding for 30 days has historically delivered strong returns. Over the past three years, this approach achieved a total return of 155.69%, significantly outperforming the 53.10% benchmark return. The strategy's CAGR of 38.28% highlights consistent growth, while its maximum drawdown of 0.00% and a Sharpe ratio of 0.74 indicate strong risk-adjusted performance despite its volatility of 51.96%.

Seamus Grady, CEO of Fabrinet, highlighted the company's strong Q4 performance, achieving $910 million in revenue and $2.65 in non-GAAP EPS, driven by robust growth in telecom and optical communications. Grady noted the successful navigation of a major datacom product transition and a key partnership with Amazon Web Services, which is expected to drive revenue in fiscal 2026. The construction of Building 10, which will add 2 million square feet of capacity, is underway and may be accelerated due to rising customer demand. Grady expressed optimism about fiscal 2026, citing growth in next-gen telecom systems, data center interconnects, and high-performance compute programs.

Fabrinet expects Q1 2026 revenue in the range of $910 million to $950 million. The company anticipates a sequential dip in Datacom revenue due to temporary component shortages but expects strong growth in telecom and non-optical communications. Gross margins are expected to remain within the mid-12% target range, and operating leverage is expected to drive margin improvement. Capital expenditures may rise temporarily if Building 10 construction accelerates, but the company remains committed to its capital allocation priorities, including shareholder returns via buybacks.

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