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FN posted Q2 non-GAAP EPS of $3.36, up 28.7% Y/Y, beating consensus estimates by 3.07%.
FN's revenues rose 35.9% Y/Y to $1.13B, the fastest growth rate since IPO and 5.03% above estimates.
FN's non-optical segment grew 61% Y/Y to $300.3M, led by automotive, industrial laser and HPC demand.
Fabrinet (FN - Free Report) reported non-GAAP earnings of $3.36 per share in second-quarter fiscal 2026, beating the Zacks Consensus Estimate by 3.07%. The figure increased 28.7% year over year.
Revenues of $1.13 million increased 35.9% on a year-over-year basis — the fastest growth rate since the IPO — and surpassed the consensus mark by 5.03%.
FN’s Q2 Segment Details
Optical Communications, as a percentage of revenues, was 73.5%, down from 77.6% in the year-ago quarter. Datacom contributed 33.4% to total optical communications revenues, while Telecom contributed 66.6%.
Datacom revenues declined 7% year over year to $278.1 million, while telecom revenues rose 59.3% year over year to $554.4 million.
Non-Optical Communications, as a percentage of revenues, was 26.5% compared with 22.4% in the year-ago quarter.
The non-optical communications segment delivered solid growth, with revenues rising 61% year over year to $300.3 million. Within the segment, Automotive revenues increased 12.3% to $117 million, Industrial Laser revenues grew 10.4% to $41.4 million and Other revenues rose 26.2% to $56.4 million. High-Performance Computing contributed $85.6 million in revenues.
The non-optical communications segment saw healthy growth, with revenues increasing 61% year over year to $300.3 million. Under the non-optical communications segment, Automotive revenues rose 12.3% to $117 million, Industrial Laser revenues increased 10.4% to $41.4 million and Other revenues increased 26.2% to $56.4 million. High-Performance Computing revenues generated $85.6 million.
Gross profit expanded 35.4% year over year to $140.3 million in the fiscal second quarter, although gross margin remained flat on a year-over-year basis.
Non-GAAP operating profit reached $123.4 million in the quarter under review, reflecting a 30-basis-point year-over-year improvement in operating margin to 10.9%.
FN’s Balance Sheet & Cash Flow
As of Dec. 26, 2025, cash and cash equivalents and short-term investments were $960.8 million compared with $968.8 million as of Sept. 26, 2025.
The company generated $46.3 million in cash flow from operating activities in the reported quarter compared with $102.6 million in the previous quarter.
Non-GAAP free cash flow turned negative at $5.3 million, down from $57.3 million reported in the previous quarter.
FN’s Q3 Guidance
For third-quarter fiscal 2026, FN expects revenues to be between $1.15 billion and $1.20 billion. Non-GAAP earnings are expected to be between $3.45 and $3.60 per share.
Image: Bigstock
Fabrinet Q2 Earnings Surpass Estimates, Revenues Increase Y/Y
Key Takeaways
Fabrinet (FN - Free Report) reported non-GAAP earnings of $3.36 per share in second-quarter fiscal 2026, beating the Zacks Consensus Estimate by 3.07%. The figure increased 28.7% year over year.
Revenues of $1.13 million increased 35.9% on a year-over-year basis — the fastest growth rate since the IPO — and surpassed the consensus mark by 5.03%.
FN’s Q2 Segment Details
Optical Communications, as a percentage of revenues, was 73.5%, down from 77.6% in the year-ago quarter. Datacom contributed 33.4% to total optical communications revenues, while Telecom contributed 66.6%.
Datacom revenues declined 7% year over year to $278.1 million, while telecom revenues rose 59.3% year over year to $554.4 million.
Non-Optical Communications, as a percentage of revenues, was 26.5% compared with 22.4% in the year-ago quarter.
The non-optical communications segment delivered solid growth, with revenues rising 61% year over year to $300.3 million. Within the segment, Automotive revenues increased 12.3% to $117 million, Industrial Laser revenues grew 10.4% to $41.4 million and Other revenues rose 26.2% to $56.4 million. High-Performance Computing contributed $85.6 million in revenues.
The non-optical communications segment saw healthy growth, with revenues increasing 61% year over year to $300.3 million. Under the non-optical communications segment, Automotive revenues rose 12.3% to $117 million, Industrial Laser revenues increased 10.4% to $41.4 million and Other revenues increased 26.2% to $56.4 million. High-Performance Computing revenues generated $85.6 million.
Fabrinet Price, Consensus and EPS Surprise
Fabrinet price-consensus-eps-surprise-chart | Fabrinet Quote
Fabrinet’s Operating Details
Gross profit expanded 35.4% year over year to $140.3 million in the fiscal second quarter, although gross margin remained flat on a year-over-year basis.
Non-GAAP operating profit reached $123.4 million in the quarter under review, reflecting a 30-basis-point year-over-year improvement in operating margin to 10.9%.
FN’s Balance Sheet & Cash Flow
As of Dec. 26, 2025, cash and cash equivalents and short-term investments were $960.8 million compared with $968.8 million as of Sept. 26, 2025.
The company generated $46.3 million in cash flow from operating activities in the reported quarter compared with $102.6 million in the previous quarter.
Non-GAAP free cash flow turned negative at $5.3 million, down from $57.3 million reported in the previous quarter.
FN’s Q3 Guidance
For third-quarter fiscal 2026, FN expects revenues to be between $1.15 billion and $1.20 billion. Non-GAAP earnings are expected to be between $3.45 and $3.60 per share.
FN’s Zacks Rank & Stocks to Consider
Currently, Fabrinet has a Zacks Rank #3 (Hold).
Advanced Energy (AEIS - Free Report) , Cisco Systems (CSCO - Free Report) and FormFactor (FORM - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. Each stock carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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