Fabrinet (FN) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 revenue of $1.13 billion (or $1,133 million), up 36% year-over-year, surpassing guidance and marking the fastest growth since IPO over 15 years ago.

• Non-GAAP EPS reached a record $3.36, exceeding guidance despite FX headwinds; GAAP EPS was $3.11.

• Net income for the quarter was $122 million (non-GAAP) and $112.6 million (GAAP), up 30% year-over-year.

• Multiple large strategic programs, strong execution, and robust demand across all business segments drove results.

• Maintained strong customer relationships and a diversified global manufacturing footprint.

Financial highlights

• Optical Communications revenue grew 29% year-over-year and 11% sequentially to $833 million, accounting for about 73% of Q2 revenue.

• Telecom revenue hit a record $554 million, up 59% year-over-year; DCI module revenue up 42% year-over-year.

• Non-Optical Communications revenue surged 61% year-over-year, driven by high-performance computing and automotive demand.

• Gross margin was 12.2%–12.4%, stable year-over-year; operating margin reached 10.9% (non-GAAP) and 10.1% (GAAP).

• Cash and short-term investments stood at $961 million at quarter end, with no debt.

Outlook and guidance

• Q3 revenue expected between $1.15 billion and $1.2 billion, with non-GAAP EPS guidance of $3.45–$3.60.

• Sequential growth anticipated in telecom, Datacom, and HPC; automotive expected to decline modestly.

• FX headwinds expected to persist but offset by operating leverage.

• Revenue and EPS for Q2 exceeded guidance, indicating continued strong demand.