Fabrinet shares jump 11.8% after hours, revenue tops estimates

Fabrinet (FN) shares rose 11.8% in after-hours trading as of 5:33 p.m. ET, from a regular-session close of $314.66.

Fabrinet (FN) said on Nov. 2 that revenue for the first quarter of fiscal 2027 rose 51% from a year earlier to $1.47 billion, above the company's own guidance range.

The revenue figure also topped the $1.44 billion estimate.

Non-GAAP net income per diluted share was $4.34, compared with $2.92 a year earlier. That was in line with the $4.31 expected.

Chairman and Chief Executive Officer Seamus Grady said in the company's press release: “Fiscal year 2027 is off to an excellent start with record revenue and non-GAAP earnings per share that were well above our guidance ranges.”

Fabrinet is a provider of optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers, with facilities in Thailand, the United States of America, the People's Republic of China and Israel.

Here's how the company did:

• Revenue: $1.47 billion vs. $978.1 million a year earlier, and $1.44 billion expected
• Non-GAAP EPS: $4.34 vs. $2.92 a year earlier, and $4.31 expected
• GAAP EPS: $2.86 vs. $2.66 a year earlier
• GAAP net income: $103.5 million vs. $95.9 million a year earlier

Revenue has risen in each of the last three quarters, from $978.1 million in the first quarter of fiscal 2026 to $1.32 billion in the fourth quarter of fiscal 2026, according to its SEC filings.

Guidance for the second quarter

For the quarter ending Dec. 25, 2026, the company expects revenue of $1.6 billion to $1.65 billion. That compares with the $1.375 billion to $1.425 billion range it gave on Aug. 17 for the first quarter, which revenue topped.

The company expects GAAP net income per diluted share of $3.81 to $3.96. It expects non-GAAP net income per diluted share of $4.77 to $4.92, based on about 36.2 million fully diluted shares.

The non-GAAP outlook excludes share-based compensation expenses and certain non-recurring items.

Buyback expanded

The board approved an expansion of the share repurchase program by up to an additional $103.0 million of ordinary shares. The addition brings total authorization under the existing program to $637.3 million.

The company repurchased $29.1 million of its ordinary shares in the quarter, according to its cash flow statement.

Costs and cash flow

GAAP gross margin was 11.8%, compared with 11.9% a year earlier.

The company recorded a $21.5 million charge from the revaluation of non-marketable equity securities and a $19.9 million tax provision related to the OECD Pillar Two global minimum tax framework. It excluded both from its non-GAAP results, along with $1.0 million in restructuring costs.

Operating cash flow was $21.3 million, compared with $102.6 million a year earlier. Capital expenditure was $158.7 million, and free cash flow was negative $137.4 million, compared with positive $57.3 million a year earlier.