Episode Details

Fabrinet (FN) Q4 FY2026 — Fabrinet furnished its Q4 and full-year FY2026 results on an 8-K accepted 16:22:03 ET on Monday August 17 (EDGAR filing-index page), with the call at 5:00pm ET - an AFTER-THE-CLOSE print, so Tuesday Aug 18 is the reaction session and it is fully settled. The shares closed USD482.59 against Monday's USD598.58, DOWN 19.38 pct close to close - the 2nd worst of 2,671 sessions since 2016, behind only minus 21.87 pct in January 2025 - on 3,159,345 shares, 4.27x the 20-session median and the 9th heaviest ever. But the stock had run UP 13.82 pct in the four sessions into the print, so net from Aug 11 to Aug 19 it is down 13.56 pct. Fabrinet (NYSE: FN) provides advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to OEMs. It is a Cayman Islands company operating principally from Thailand, reports under US GAAP in US dollars, and employed 21,521 people at 26 June 2026 - 21,020 of them in manufacturing operations and 21,221 in the Asia-Pacific region. Its customers own the product designs and consign their own production tooling to Fabrinet's floor, and firm purchase orders do not typically extend beyond 13 weeks. Seamus Grady has been chief executive since 2017. THE CALL: AVOID (3/5, MEDIUM - A SUPERBLY RUN ASSEMBLER ON A TWELVE-CENT MARGIN, AT THE RICHEST MULTIPLE IN ITS GROUP) — base-case value ~$385.62 vs ~$454.55 today. KEY METRICS: - Q4 FY2026 revenue USD1,315.8M, up 44.6 pct on USD909.7M, above the guided range; GAAP net income USD139.3M and GAAP diluted EPS USD3.83; non-GAAP net income USD149.1M and non-GAAP diluted EPS USD4.10 against USD2.65, beating a USD3.81 consensus by 7.6 pct on revenue that beat by 3.1 pct. Full year revenue USD4,641.1M, up 35.7 pct; GAAP EPS USD13.05; non-GAAP EPS USD14.09. - The margin that does not move: gross profit USD556.5M on a 12.0 pct gross margin, against 12.1 pct last year and 12.4 pct the year before - across which revenue grew 61.0 pct. Cost of revenue is 88.0 pct of sales. Non-GAAP operating margin improved to 10.8 pct from 10.5 pct purely on overhead, with SG&A held to USD93.5M, 2.0 pct of sales against 2.6 pct. - Cash and structure: free cash flow USD4.2M against USD207.3M last year, so 0.9 pct of USD473.0M of net income reached cash; operating cash flow fell 21.8 pct to USD256.7M while capital spending more than doubled to USD252.5M. Inventory rose 75.8 pct to USD1,021.2M and receivables 34.1 pct to USD1,017.9M. Purchase obligations to third parties total USD3.15 billion, 5.66x a year of gross profit. What to watch: The Q4/FY2026 8-K accepted 16:22:03 ET on 17 August 2026 and its Exhibit 99.1, read against the Form 10-K accepted 07:12:07 ET the next morning. Item 1 of that 10-K names the four customers above 10 pct of revenue - Cisco 19.9 pct, NVIDIA 16.3 pct, Nokia 10.7 pct and Amazon 10.5 pct - against two the prior year, and shows NVIDIA falling from 35.1 pct two years ago. The same 8-K discloses a THB 2.50 billion term loan, about USD75.0M, drawn the day of the print. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.