Fabrinet
For the period ended Jun 26, 2026. Filed Aug 18, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Aug 18, 2026
FN$327.13+11.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-06-27; filed 2025-08-19.
0001408710-25-000039
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-06-26; filed 2026-08-18.
0001408710-26-000028
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 142 previous paragraphs and 149 current paragraphs.
99 unchanged; 38 reworded; 11 added; 3 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
To better reflect our current business profile, beginning in the fourth quarter of fiscal year 2026, we updated our revenue category presentation from optical communications and non-optical communications to data center, communications infrastructure, and automotive, industrial and other markets. Beginning in the fourth quarter of fiscal year 2026, we also updated our geographic area presentation from the bill-to-location of our customers to the ship-to-location of our customers. Prior periods have been recast to conform to the current presentation.
Current report
The OECD introduced a global minimum tax framework (“Pillar Two”) that imposes a minimum tax rate of 15% on multinational enterprise groups with annual consolidated revenue exceeding €750 million. Pillar Two includes a Qualified Domestic Minimum Top-up Tax (“QDMTT”), an Income Inclusion Rule (“IRR”), and an Undertaxed Profits Rule (“UTPR”).
Current report
The OECD has issued Pillar Two model rules and continues to release guidance on these rules. As of June 26, 2026, these rules are either effective or have been adopted in draft form in various countries. We evaluated the applicable tax law changes resulting from Pillar Two implementation in the countries where we operate. Fabrinet is incorporated in a jurisdiction that has not adopted Pillar Two rules. Certain other jurisdictions in which we operate, including Thailand, have enacted legislation that may impose UTPR top-up tax with respect to low-taxed income of other constituent entities within our consolidated group.
Current report
For the year ended June 26, 2026, we recognized $57.4 million of current income tax expense related to enacted Pillar Two UTPR legislation. The related liability is included within income tax payable in the consolidated balance sheets. We continue to evaluate enacted legislation, administrative guidance, and the application of transitional safe harbors in the jurisdictions in which we operate. Future changes in enacted tax laws and interpretations could materially affect our future effective tax rate and cash tax obligations.
Current report
Non-marketable equity securities
Current report
Non-marketable equity securities consist of investments in private companies without readily determinable fair values. It is measured at cost minus impairment, if any, and are adjusted for observable price changes. These adjustments may require use of unobservable inputs.
Current report
We assess impairment annually based on qualitative and quantitative factors, including the investee’s operating performance, financial condition, market conditions, and other relevant events and circumstances that may indicate the carrying amount is not recoverable.
Current report
(1) Data center includes data center interconnect (DCI), high-performance computing (HPC), and other data center-specific applications.
Current report
(2) Communications infrastructure includes communications and networking products that are not specific to data center applications, primarily telecommunications products excluding DCI.
Current report
(3) Automotive, Industrial and Others includes products serving automotive components, industrial, medical devices and sensors.
Current report
Revenues. Our revenues increased by $1,221.8 million, or 35.7%, to $4,641.1 million for fiscal year 2026, compared with $3,419.3 million for fiscal year 2025. This increase was primarily due to an increase in our key customers’ demand for both data center products and communications infrastructure products. Revenues from data center products, which represented $2,225.1 million, or 47.9%, of our revenues for fiscal year 2026, increased by $645.2 million, or 40.8%, compared to the prior fiscal year. Revenues from communications infrastructure products, which represented $1,546.4 million, or 33.3%, of our revenues for fiscal year 2026, increased by $497.0 million, or 47.4%, compared to the prior fiscal year. Revenues from automotive, industrial and others products, which represented $869.6 million, or 18.8%, of our revenues for fiscal year 2026, increased by $79.6 million, or 10.1%, compared to the prior fiscal year.
Removed paragraphs (3)
Previous report
During fiscal year 2023, the other subsidiary in the U.K. generated taxable income and was able to utilize loss carryforwards. Management determined that it was more likely than not that future taxable income would be sufficient to allow utilization of the deferred tax assets. Thus, a full valuation allowance of $1.6 million for the deferred tax assets was released as of June 30, 2023. In fiscal year 2024, due to the planned closure of this entity, management believed that it would not generate sufficient taxable income to utilize the remaining deferred tax assets. Thus, a full valuation allowance of $1.0 million was recorded. In fiscal year 2025, the remaining deferred tax assets and valuation allowance were written off after the application to dissolve the entity was filed in the U.K.
Previous report
Revenues. Our revenues increased by $237.8 million, or 9.0%, to $2,883.0 million for fiscal year 2024, compared with $2,645.2 million for fiscal year 2023. This increase was primarily due to an increase in our key customers’ demand for optical communication products. Revenues from optical communications products, which represented $2,289.0 million, or 79.4%, of our revenues for fiscal year 2024, increased by $280.7 million, or 14.0%, compared to prior fiscal year, mainly due to an increase in revenues from data communication products, primarily for artificial intelligence applications, offset by a decline in revenues from telecommunication products as inventory absorption within the telecommunication market continued during fiscal year 2024. Revenues from non-optical communications products, which represented $594.0 million, or 20.6%, of our revenues for fiscal year 2024, decreased by $42.9 million, or 6.7%, compared to prior fiscal year, primarily due to inventory absorption related to certain programs in the automotive market.
Previous report
Interest expense. Our interest expense decreased by $1.4 million to $0.1 million for fiscal year 2024, compared with $1.5 million for fiscal year 2023. The decrease was primarily due to a decrease in the long-term balance.
Reworded paragraphs (38)
Previous wording
We utilize a 52-53 week fiscal year ending on the last Friday in June. Our fiscal years 2025, 2024, and 2023 ended on June 27, 2025, June 28, 2024, and June 30, 2023, and consisted of 52 weeks, 52 weeks and 53 weeks, respectively.
Current wording
We utilize a 52-53 week fiscal year ending on the last Friday in June. Our fiscal years 2026, 2025, and 2024 ended on June 26, 2026, June 27, 2025, and June 28, 2024, respectively, and each consisted of 52 weeks.
Previous wording
We generate revenues from three geographic regions: North America, Asia-Pacific and others, and Europe. Revenues are attributed to a particular geographic area based on the bill-to location of our customers, notwithstanding that the products may be shipped to a different geographic region. The substantial majority of our revenues are derived from our manufacturing facilities in Asia-Pacific.
Current wording
We generate revenues from three geographic regions: Asia-Pacific and others, North America, and Europe. Revenues are attributed to a particular geographic area based on the ship-to location of our customers, notwithstanding that the products may be billed to a different geographic region. The substantial majority of our revenues are derived from our manufacturing facilities in Asia-Pacific.
Previous wording
The percentage of our revenues generated from a bill-to location outside of North America decreased from 63.5% in fiscal year 2024 to 56.6% in fiscal year 2025, primarily because of an increase in revenue from sales to our customers in North America. Based on the short- and medium-term indications and forecasts from our customers, we expect that the portion of our future revenues attributable to customers in regions outside of North America will increase as compared with the portion of revenues attributable to such customers during fiscal year 2025.
Current wording
The percentage of our revenues generated from a ship-to location outside of North America decreased from 78.4% in fiscal year 2025 to 77.3% in fiscal year 2026, primarily because of an increase in revenue from sales to our customers in North America. Based on the short- and medium-term indications and forecasts from our customers, we expect that the portion of our future revenues attributable to customers in regions outside of North America will increase as compared with the portion of revenues attributable to such customers during fiscal year 2026.
Previous wording
During fiscal years 2025, 2024 and 2023, discretionary merit-based bonus awards were made to our non-executive employees. Charges included in cost of revenues for bonus awards to non-executive employees were $7.7 million, $7.1 million and $6.8 million for fiscal years 2025, 2024 and 2023, respectively.
Current wording
During fiscal years 2026, 2025 and 2024, discretionary merit-based bonus awards were made to our non-executive employees. Charges included in cost of revenues for bonus awards to non-executive employees were $9.5 million, $7.7 million and $7.1 million for fiscal years 2026, 2025 and 2024, respectively.
Previous wording
Share-based compensation expense included in cost of revenues was $10.5 million, $7.2 million and $6.7 million for fiscal years 2025, 2024 and 2023, respectively.
Current wording
Share-based compensation expense included in cost of revenues was $11.5 million, $10.5 million and $7.2 million for fiscal years 2026, 2025 and 2024, respectively.
Previous wording
Our SG&A expenses primarily consist of corporate employee costs for sales and marketing, general and administrative and other support personnel, including research and development expenses related to the design of customized optics and glass, travel expenses, legal and other professional fees, share-based compensation expense and other general expenses not related to cost of revenues. In fiscal year 2026, we expect our SG&A expenses will increase compared with our fiscal year 2025 SG&A expenses, mainly due to increased investment in information technology hardware and increased compensation-related expenses.
Current wording
Our SG&A expenses primarily consist of corporate employee costs for sales and marketing, general and administrative and other support personnel, including research and development expenses related to the design of customized optics and glass, travel expenses, legal and other professional fees, share-based compensation expense and other general expenses not related to cost of revenues. In fiscal year 2027, we expect our SG&A expenses will increase compared with our fiscal year 2026 SG&A expenses, mainly due to increases in research and development expenses, investments in information technology hardware, and compensation-related expenses.
Previous wording
Charges included in SG&A expenses for bonus distributions to non-executive and executive employees were $6.8 million, $6.4 million and $6.1 million for fiscal years 2025, 2024 and 2023, respectively.
Current wording
Charges included in SG&A expenses for bonus distributions to non-executive and executive employees were $7.0 million, $6.8 million and $6.4 million for fiscal years 2026, 2025 and 2024, respectively.
Previous wording
Share-based compensation expense included in SG&A expenses was $22.5 million, $21.2 million and $20.9 million for fiscal years 2025, 2024 and 2023, respectively.
Current wording
Share-based compensation expense included in SG&A expenses was $23.2 million, $22.5 million and $21.2 million for fiscal years 2026, 2025 and 2024, respectively.
Previous wording
The Thai baht assets represent cash and cash equivalents, trade accounts receivable, deposits and other current assets. The Thai baht liabilities represent trade accounts payable, accrued expenses, income tax payable, accrued employee benefits and other payables. We manage our exposure to fluctuations in foreign exchange rates by the use of foreign currency contracts and offsetting assets and liabilities denominated in the same currency in accordance with management’s policy. As of June 27, 2025, there was $165.0 million of foreign currency forward contracts outstanding on the Thai baht payables. As of June 28, 2024, there was $135.0 million of foreign currency forward contracts outstanding on the Thai baht payables.
Current wording
The Thai baht assets represent cash and cash equivalents, trade accounts receivable, deposits and other current assets. The Thai baht liabilities represent trade accounts payable, accrued expenses, income tax payable, accrued employee benefits and other payables. We manage our exposure to fluctuations in foreign exchange rates by the use of foreign currency contracts and offsetting assets and liabilities denominated in the same currency in accordance with management’s policy. As of June 26, 2026, there was $280.0 million of foreign currency forward contracts outstanding on the Thai baht payables. As of June 27, 2025, there was $165.0 million of foreign currency forward contracts outstanding on the Thai baht payables.
Previous wording
The GBP assets represent cash, trade accounts receivable, and other current assets. The GBP liabilities represent trade accounts payable, accrued expenses, and other payables. As of June 27, 2025 and June 28, 2024, we did not have any derivative contracts denominated in GBP.
Current wording
The GBP assets represent cash, trade accounts receivable, and other current assets. The GBP liabilities represent trade accounts payable, and accrued expenses. As of June 26, 2026 and June 27, 2025, we did not have any derivative contracts denominated in GBP.
Previous wording
For fiscal years 2025 and 2024, we recorded an unrealized gain of $1.9 million and $0.7 million, respectively, related to derivatives that are not designated as hedging instruments in the consolidated statements of operations and comprehensive income.
Current wording
For fiscal years 2026, 2025 and 2024, we recorded an unrealized loss of $2.8 million, unrealized gain of $1.9 million and unrealized gain of $0.7 million, respectively, related to derivatives that are not designated as hedging instruments in the consolidated statements of operations and comprehensive income.
Previous wording
Throughout the period of our operations in Thailand, we have generally received income tax and other incentives from the Thailand Board of Investment. Preferential tax treatment from the Thai government in the form of a corporate tax exemption on income generated from projects to manufacture certain products at our Chonburi campus is currently available to us through June 2026. Similar preferential tax treatment was available to us through June 2020 with respect to products manufactured at our Pinehurst campus Building 6. Between June 2020 and June 2025, 50% of our income generated from products manufactured at our Pinehurst campus was exempted from tax. Preferential tax treatment is available to us for products manufactured at our Chonburi campus Building 9, where income generated will be tax exempt through 2031, capped at our actual investment amount. Such preferential tax treatment is contingent on various factors, including the export of our customers’ products out of Thailand and our agreement not to move our manufacturing facilities out of our current province in Thailand for at least 15 years from the date on which preferential tax treatment was granted. Currently, the corporate income tax rate for our Thai subsidiary is 20%.
Current wording
Throughout the period of our operations in Thailand, we have generally received income tax and other incentives from the Thailand Board of Investment. Preferential tax treatment from the Thai government is available to us for products manufactured at our Chonburi campus Building 9, where income generated will be tax exempt through 2031, capped at our actual investment amount of $52.2 million. Similar preferential tax treatment was available to us through June 2026 with respect to products manufactured at our Chonburi campus and through June 2020 with respect to products manufactured at our Pinehurst campus Building 6. Between June 2020 and June 2025, 50% of our income generated from products manufactured at our Pinehurst campus was exempted from tax. Beginning in August 2027, preferential tax treatment will be available to us for products manufactured at our Navanakorn campus for 8 years, capped at our actual investment amount of $25.1 million. Such preferential tax treatment is contingent on various factors, including the export of our customers’ products out of Thailand and our agreement not to move our manufacturing facilities out of our current province in Thailand for at least 15 years from the date on which preferential tax treatment was granted. Currently, the corporate income tax rate for our Thai subsidiary is 20%.
Previous wording
Our inventory is stated at the lower of cost (on a first-in, first-out basis) or market value. Our industry is characterized by rapid technological change, short-term customer commitments, and rapid changes in demand. We make provisions for estimated excess and obsolete inventory based on regular reviews of inventory quantities on hand on a quarterly basis and the latest forecasts of product demand and production requirements from our customers. If actual market conditions or our customers’ product demands are less favorable than those projected, additional provisions may be required. In addition, unanticipated changes in liquidity or the financial positions of our customers or changes in economic conditions may require additional provisions for inventory due to our customers’ inability to fulfill their contractual obligations. As the market conditions or our customers’ product demands are inherently difficult to predict, the actual volumes may vary significantly from projected volumes. Differences in forecasted volume used in calculating excess and obsolete inventory can result in a material adverse effect on our business, financial condition and results of operations. During fiscal year 2025 and fiscal year 2024, a change of 10% for excess and obsolete materials, based on product demand and production requirements from our customers, would have affected our net income by approximately $0.6 million for both years.
Current wording
Our inventory is stated at the lower of cost (on a first-in, first-out basis) or market value. Our industry is characterized by rapid technological change, short-term customer commitments, and rapid changes in demand. We make provisions for estimated excess and obsolete inventory based on regular reviews of inventory quantities on hand on a quarterly basis and the latest forecasts of product demand and production requirements from our customers. If actual market conditions or our customers’ product demands are less favorable than those projected, additional provisions may be required. In addition, unanticipated changes in liquidity or the financial positions of our customers or changes in economic conditions may require additional provisions for inventory due to our customers’ inability to fulfill their contractual obligations. As the market conditions or our customers’ product demands are inherently difficult to predict, the actual volumes may vary significantly from projected volumes. Differences in forecasted volume used in calculating excess and obsolete inventory can result in a material adverse effect on our business, financial condition and results of operations. During fiscal year 2026 and fiscal year 2025, a change of 10% for excess and obsolete materials, based on product demand and production requirements from our customers, would have affected our net income by approximately $0.7 million and $0.6 million, respectively.
Previous wording
During fiscal year 2024, our subsidiary in Israel generated net operating loss and management expected that such subsidiary would continue to have net operating losses in the foreseeable future. Therefore, management believed it was more likely than not that all of the deferred tax assets of such subsidiary would not be utilized. Thus, a full valuation allowance of $2.7 million for the deferred tax assets was set up as of the end of fiscal year 2024. The full valuation allowance of $2.7 million continued to be recorded for the fiscal year ended June 27, 2025.
Current wording
During fiscal year 2024, our subsidiary in Israel generated net operating loss and management expected that such subsidiary would continue to have net operating losses in the foreseeable future. Therefore, management believed it was more likely than not that all of the deferred tax assets of such subsidiary would not be utilized. Thus, a full valuation allowance of $2.7 million for the deferred tax assets was set up as of the end of fiscal year 2024. We continued to record the full valuation allowance of $0.8 million and $2.1 million for fiscal year 2025 and fiscal year 2026, respectively.
Previous wording
The following table sets forth our revenues by end market and product category for the periods indicated.
Current wording
To better reflect our current business profile, beginning in the fourth quarter of fiscal year 2026, we updated our revenue category presentation from optical communications and non-optical communications to data center, communications infrastructure, and automotive, industrial and other markets. Prior periods have been recast to conform to the current presentation. The following table sets forth our revenues by end market and product category for the periods indicated.
Previous wording
Cost of revenues. Our cost of revenues increased by $479.2 million, or 19.0%, to $3,006.0 million, or 87.9% of revenues, for fiscal year 2025, compared with $2,526.8 million, or 87.6% of revenues, for fiscal year 2024. The increase was in line with the increase in sales volume.
Current wording
Cost of revenues. Our cost of revenues increased by $1,078.6 million, or 35.9%, to $4,084.6 million, or 88.0% of revenues, for fiscal year 2026, compared with $3,006.0 million, or 87.9% of revenues, for fiscal year 2025. The increase was in line with the increase in sales volume.
Previous wording
Gross profit. Our gross profit increased by $19.8 million, or 5.9%, to $356.1 million, or 12.4% of revenues, for fiscal year 2024, compared with $336.3 million, or 12.7% of revenues, for fiscal year 2023. The increase was primarily due to sales volume and product mix.
Current wording
Gross profit. Our gross profit increased by $143.2 million, or 34.6%, to $556.5 million, or 12.0% of revenues, for fiscal year 2026, compared with $413.3 million, or 12.1% of revenues, for fiscal year 2025. The increase was primarily due to sales volume and product mix.
Previous wording
SG&A expenses. Our SG&A expenses increased by $0.8 million, or 1.0%, to $78.5 million, or 2.8% of revenues, for fiscal year 2024, compared with $77.7 million, or 2.9% of revenues, for fiscal year 2023. Our SG&A expenses increased during fiscal year 2024, compared with fiscal year 2023, mainly due to (1) an increase in sales and marketing expenses of $1.0 million; (2) a net increase in allowance for expected credit losses of $0.9 million; (3) an increase in information technology repair and maintenance expenses of $0.5 million; (4) an increase in R&D expenses of $0.3 million; and (5) an increase in share-based compensation expenses of $0.2 million; offset by (1) recognizing an actuarial gain on obligation of $0.4 million in fiscal year 2024, compared with recognizing an actuarial loss on obligation of $1.1 million in fiscal year 2023; (2) a decrease in legal and consulting fees of $0.4 million; and (3) a decrease in customer relationships amortization of $0.2 million.
Current wording
SG&A expenses. Our SG&A expenses increased by $6.0 million, or 6.9%, to $93.5 million, or 2.0% of revenues, for fiscal year 2026, compared with $87.5 million, or 2.6% of revenues, for fiscal year 2025. Our SG&A expenses increased during fiscal year 2026, compared with fiscal year 2025, mainly due to (1) an increase in information technology related expenses of $2.2 million, mainly from network, security system and new hardware costs, (2) an increase in executive compensation related expenses of $1.3 million, (3) an increase in R&D expenses of $1.2 million, (4) an increase in share-based compensation expenses of $0.6 million, (5) a net realized loss from financial instruments of $0.4 million, and (6) an increase in severance expenses of $0.3 million.
Previous wording
Operating income. Our operating income increased by $25.9 million, or 10.3%, to $277.6 million, or 9.6% of revenues, for fiscal year 2024, compared with $251.7 million, or 9.5% of revenues, for fiscal year 2023.
Current wording
Operating income. Our operating income increased by $138.5 million, or 42.7%, to $462.9 million, or 10.0% of revenues, for fiscal year 2026, compared with $324.4 million, or 9.4% of revenues, for fiscal year 2025.
Previous wording
Interest income. Our interest income increased by $22.0 million, or 196.4% to $33.2 million, or 1.2% for fiscal year 2024, compared with $11.2 million, or 0.4% for fiscal year 2023. The increase was primarily due to a higher weighted average interest rate in fiscal year 2024, and a higher average cash balance and short-term investment of $722.0 million in fiscal year 2024, compared with $468.0 million in fiscal year 2023.
Current wording
Interest income. Our interest income decreased by $7.8 million, or 19.4% to $32.4 million, or 0.7% of revenues, for fiscal year 2026, compared with $40.2 million, or 1.2% for fiscal year 2025. The decrease was primarily due to a lower average cash balance and short-term investment of $872.0 million in fiscal year 2026, compared with $919.0 million in fiscal year 2025, and the average interest rate decreasing from 4.2% to 3.7%.
Previous wording
Foreign exchange gain (loss), net. We recorded foreign exchange gain, net of $0.4 million for fiscal year 2024, compared with foreign exchange loss, net of $1.2 million for fiscal year 2023. The foreign exchange gain was mainly due to (1) lower realized loss from payment/receipt of $1.0 million, (2) unrealized gain from revaluation of outstanding Thai baht assets and liabilities of $0.9 million, and (3) higher unrealized gain from mark-to-market of forward contracts of $0.3 million, offset by (1) unrealized loss from revaluation of currencies other than Thai baht of $0.5 million, and (2) lower foreign exchange gain, totaling $0.1 million from our subsidiaries in the PRC and the U.K.
Current wording
Foreign exchange gain (loss), net. We recorded foreign exchange gain, net of $2.9 million for fiscal year 2026, compared with foreign exchange loss, net of $9.3 million for fiscal year 2025. The foreign exchange gain was mainly due to (1) unrealized gain from revaluation of outstanding Thai baht assets and liabilities of $11.9 million, (2) unrealized gain from revaluation of currencies other than Thai baht of $3.0 million, (3) lower realized loss from payment/receipt of $1.6 million, and (4) lower foreign exchange loss totaling $0.5 million from our subsidiaries in the PRC and the U.K., offset by unrealized loss from mark-to-market of forward contracts of $4.8 million.
Previous wording
Income before income taxes. We recorded income before income taxes of $311.4 million for fiscal year 2024, compared with $260.1 million for fiscal year 2023.
Current wording
Income before income taxes. We recorded income before income taxes of $555.1 million for fiscal year 2026, compared with $355.2 million for fiscal year 2025.
Previous wording
Income tax expense. Our provision for income tax reflects an effective tax rate of 4.9% and 4.7% for fiscal year 2024 and fiscal year 2023, respectively. The increase was primarily due to a full valuation allowance of $3.8 million for deferred tax assets set up in fiscal year 2024.
Current wording
Income tax expense. Our provision for income tax reflects an effective tax rate of 14.8% and 6.4% for fiscal year 2026 and fiscal year 2025, respectively. The increase was primarily due to top-up taxes recorded under the Pillar Two framework in fiscal year 2026.
Previous wording
Net income. We recorded net income of $296.2 million, or 10.3% of revenues, for fiscal year 2024, compared with net income of $247.9 million, or 9.4% of revenues, for fiscal year 2023.
Current wording
Net income. We recorded net income of $473.0 million, or 10.2% of revenues, for fiscal year 2026, compared with net income of $332.5 million, or 9.7% of revenues, for fiscal year 2025.
Previous wording
Other comprehensive income (loss). We recorded other comprehensive income of $5.0 million, or 0.2% of revenues, for fiscal year 2024, compared with other comprehensive income of $4.7 million, or 0.2% of revenues, for fiscal year 2023. The increase in other comprehensive income was mainly due to higher unrealized gain from mark-to-market of forward contracts and interest rate swap agreement of $1.0 million, offset by (1) lower unrealized gain from mark-to-market of available-for-sale debt securities of $0.6 million, and (2) lower gain from retirement benefits plan of $0.1 million.
Current wording
Other comprehensive income (loss). We recorded other comprehensive loss of $9.3 million, or 0.2% of revenues, for fiscal year 2026, compared with other comprehensive income of $13.4 million, or 0.4% of revenues, for fiscal year 2025. The change was mainly due to (1) unrealized loss from mark-to-market of available-for-sale debt securities of $13.0 million, (2) unrealized loss from mark-to-market of forward contracts of $8.4 million, and (3) unrealized loss from foreign currency translation adjustment of $1.3 million.
Previous wording
Revenues. Our revenues increased by $536.3 million, or 18.6%, to $3,419.3 million for fiscal year 2025, compared with $2,883.0 million for fiscal year 2024. This increase was primarily due to an increase in our key customers’ demand for both optical communications products and non-optical communications products. Revenues from optical communications products, which represented $2,619.4 million, or 76.6%, of our revenues for fiscal year 2025, increased by $330.3 million, or 14.4%, compared to the prior fiscal year, mainly due to an increase in revenues from telecommunication products, as inventory absorption issues substantially subsided during fiscal year 2025. Revenues from non-optical communications products, which represented $800.0 million, or 23.4%, of our revenues for fiscal year 2025, increased by $206.0 million, or 34.7%, compared to prior fiscal year, primarily due to growth in automotive revenue as short-term inventory absorption issues substantially subsided during fiscal year 2025.
Current wording
Revenues. Our revenues increased by $536.3 million, or 18.6%, to $3,419.3 million for fiscal year 2025, compared with $2,883.0 million for fiscal year 2024. This increase was primarily due to an increase in our key customers’ demand for data center products, communications infrastructure products, and automotive, industrial and others products. Revenues from data center products, which represented $1,579.9 million, or 46.2%, of our revenues for fiscal year 2025, increased by $50.2 million, or 3.3%, compared to the prior fiscal year. Revenues from communications infrastructure products, which represented $1,049.4 million, or 30.7%, of our revenues for fiscal year 2025, increased by $282.0 million, or 36.8%, compared to the prior fiscal year. Revenues from automotive, industrial and others products, which represented $790.0 million, or 23.1%, of our revenues for fiscal year 2025, increased by $204.1 million, or 34.8%, compared to the prior fiscal year, primarily due to growth in automotive revenue as short-term inventory absorption issues substantially subsided during fiscal year 2025.
Previous wording
Cost of revenues. Our cost of revenues increased by $217.8 million, or 9.4%, to $2,526.8 million, or 87.6% of revenues, for fiscal year 2024, compared with $2,309.0 million, or 87.3% of revenues, for fiscal year 2023. The increase in cost of revenues was primarily due to a proportional increase in sales volume.
Current wording
Cost of revenues. Our cost of revenues increased by $479.2 million, or 19.0%, to $3,006.0 million, or 87.9% of revenues, for fiscal year 2025, compared with $2,526.8 million, or 87.6% of revenues, for fiscal year 2024. The increase in cost of revenues was primarily due to a proportional increase in sales volume.
Previous wording
Restructuring and other related costs. We recorded $1.4 million in restructuring costs for fiscal year 2025, due to restructuring of operations in our subsidiary in Thailand. We recorded a de minimis amount of restructuring costs for fiscal year 2024.
Current wording
Restructuring and other related costs. We recorded $1.4 million in restructuring costs for fiscal year 2025, due to restructuring of operations in our subsidiary in Thailand. We recorded an immaterial amount of restructuring costs for fiscal year 2024.
Previous wording
Operating income. Our operating income increased by $46.8 million, or 16.9%, to $324.4 million, or 9.5% of revenues, for fiscal year 2025, compared with $277.6 million, or 9.6% of revenues, for fiscal year 2024.
Current wording
Operating income. Our operating income increased by $46.8 million, or 16.9%, to $324.4 million, or 9.4% of revenues, for fiscal year 2025, compared with $277.6 million, or 9.6% of revenues, for fiscal year 2024.
Previous wording
Interest income. Our interest income increased by $7.0 million, or 21.1% to $40.2 million, or 1.2% of revenues, for fiscal year 2025, compared with $33.2 million, or 1.2% for fiscal year 2024. The increase was primarily due to a higher average cash balance and short-term investment of $919.0 million in fiscal year 2025, compared with $722.0 million in fiscal year 2024.
Current wording
Interest income. Our interest income increased by $7.0 million, or 21.1% to $40.2 million, or 1.2% of revenues, for fiscal year 2025, compared with $33.2 million, or 1.2% of revenues, for fiscal year 2024. The increase was primarily due to a higher average cash balance and short-term investment of $919.0 million in fiscal year 2025, compared with $722.0 million in fiscal year 2024.
Previous wording
We primarily finance our operations through cash flow from operating activities. As of June 27, 2025 and June 28, 2024, we had cash, cash equivalents, and short-term investments of $934.2 million and $858.6 million, respectively, and no outstanding debt.
Current wording
We primarily finance our operations through cash flow from operating activities. As of June 26, 2026 and June 27, 2025, we had cash, cash equivalents, and short-term investments of $875.1 million and $934.2 million, respectively, and no outstanding debt.
Previous wording
Our cash and cash equivalents, which primarily consist of cash on hand, demand deposits and liquid investments with original maturities of three months or less, are placed with banks and other financial institutions. The weighted average interest rate on our cash and cash equivalents for fiscal year 2025, fiscal year 2024 and fiscal year 2023 was 4.2%, 4.4% and 2.4%, respectively.
Current wording
Our cash and cash equivalents, which primarily consist of cash on hand, demand deposits and liquid investments with original maturities of three months or less, are placed with banks and other financial institutions. The weighted average interest rate on our cash and cash equivalents for fiscal year 2026, fiscal year 2025 and fiscal year 2024 was 3.7%, 4.2% and 4.4%, respectively.
Previous wording
We also believe that our current manufacturing capacity is sufficient to meet our anticipated production requirements for at least the next few quarters. In February 2025, we began construction of a new manufacturing facility of approximately 2.0 million square feet at our Chonburi campus. The total expected cost of the project is approximately $132.5 million (Thai baht 4.45 billion).
Current wording
We also believe that our current manufacturing capacity is sufficient to meet our anticipated production requirements for at least the next few quarters. In February 2025, we began construction of a new manufacturing facility of approximately 2.0 million square feet at our Chonburi campus. The total expected cost of the project is approximately $132.5 million (Thai baht 4.45 billion). As of June 26, 2026, the remaining balance was approximately $39.7 million.
Previous wording
Cash provided by operating activities is net income adjusted for certain non-cash items and changes in certain assets and liabilities. The decrease in cash provided by operating activities for fiscal year 2025 as compared to fiscal year 2024 was primarily due to (1) a change in inventories of $174.2 million due to new products and higher sales volume, and (2) an increase in trade receivables of $104.4 million, offset by (1) an increase in trade payables of $134.2 million, (2) an increase in net income of $36.3 million, (3) a change in other current and non-current assets of $13.1 million, and (4) an increase in accrued expenses of $11.6 million.
Current wording
Cash provided by operating activities is net income adjusted for certain non-cash items and changes in certain assets and liabilities. The decrease in cash provided by operating activities for fiscal year 2026 as compared to fiscal year 2025 was primarily due to (1) an increase in inventories to support higher demand in the next quarter, and (2) an increase in trade receivables due to timing of collection, partially offset by (1) an increase in trade payables aligned with the increasing volume of inventories, and (2) an increase in net income.
Previous wording
Investing cash flows consist primarily of investment purchases, sales, maturities, and disposals; and capital expenditures. The increase in cash used in investing activities for fiscal year 2025 as compared to cash used in investing activities for fiscal year 2024 was primarily due to (1) an increase related to the commencement of construction of a new manufacturing building at our Chonburi campus, (2) an increase in capital expenditures to support certain customers, and (3) a decrease in proceeds of investment.
Current wording
Investing cash flows consist primarily of investment purchases, sales, maturities, and disposals; and capital expenditures. The decrease in cash used in investing activities for fiscal year 2026 as compared to cash used in investing activities for fiscal year 2025 was primarily due to (1) net proceeds of short-term investments, partially offset by (1) an increase in capital expenditures related to construction of a new manufacturing building at Chonburi campus and support certain customers, and (2) investment in non-marketable equity securities.
Previous wording
Financing cash flows consist primarily of repayment of long-term debt, share repurchases, and withholding tax related to net share settlement of restricted share units. The increase in cash used in financing activities for fiscal year 2025 as compared to the fiscal year 2024 was primarily due to an increase in share repurchases and higher withholding tax related to net share settlement of restricted share units, offset by lower repayment of long-term borrowings.
Current wording
Financing cash flows consist primarily of repayment of long-term debt, share repurchases, and withholding tax related to net share settlement of restricted share units. The decrease in cash used in financing activities for fiscal year 2026 as compared to the fiscal year 2025 was primarily due to a decrease in share repurchases, offset by an increase in withholding tax related to net share settlement of restricted share units.
Previous wording
As of June 27, 2025, we have certain operating lease arrangements under which the lease payments are calculated using the straight-line method. Our rental expenses under these leases to be paid within one year and after one year are $2.1 million and $4.4 million, respectively.
Current wording
As of June 26, 2026, we have certain operating lease arrangements under which the lease payments are calculated using the straight-line method. Our rental expenses under these leases to be paid within one year and after one year are $1.4 million and $3.3 million, respectively.
Previous wording
During fiscal year 2025, we invested in a new manufacturing building at our Chonburi campus and equipment for expansion of our manufacturing facilities in Thailand. We expect our capital expenditures for fiscal year 2026 to decrease compared to fiscal year 2025, mainly due to the new manufacturing building expenditures having been recognized while capital expenditures on equipment for expansion of our manufacturing facilities continue.
Current wording
During fiscal year 2026, we invested in new manufacturing buildings at our Chonburi and Pathum Thani campuses, and equipment for expansion of our manufacturing facilities in Thailand. We expect our capital expenditures for fiscal year 2027 to increase compared to fiscal year 2026, mainly due to the purchase of a new manufacturing building in California, continued investment in our manufacturing facilities at our Pathum Thani campus, and ongoing investments in equipment to support the expansion of our manufacturing capacity. These investments are intended to support future growth and increase production capacity.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Restructuring and other related costs. We recorded $0.1 million and $1.4 million in restructuring costs for fiscal year 2026 and 2025, respectively.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
During fiscal year 2020, one of our subsidiaries in the U.K. also generated net operating loss and management expected that such subsidiary would continue to have net operating losses in the foreseeable future. Therefore, management believed it was more likely than not that all of the deferred tax assets of such subsidiary would not be utilized. Thus, a full valuation allowance of $1.6 million for the deferred tax assets was set up as of the end of fiscal year 2020. A full valuation allowance of $3.8 million, $4.9 million and $2.1 million was set up for the fiscal year ended June 30, 2023, June 24, 2022 and June 25, 2021, respectively. During fiscal year 2024, deferred tax assets and valuation allowance were released due to our cessation of operations in the U.K.
Previous report — wording carried elsewhere
Restructuring and other related costs. We recorded a de minimis amount of restructuring costs for fiscal year 2024. We recorded restructuring and other related costs for fiscal year 2023 of $6.9 million.