Fabrinet
For the period ended Sep 25, 2026. Filed Nov 3, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 25, 2026 · Filed Nov 3, 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-Q
Period ended 2026-03-27; filed 2026-05-05.
0001408710-26-000016
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-25; filed 2026-11-03.
0001408710-26-000041
Item 2. 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 128 previous paragraphs and 121 current paragraphs.
78 unchanged; 30 reworded; 12 added; 14 removed; 6 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 6 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 (12)
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 September 25, 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 to implement Pillar Two.
Current report
For the three months ended September 25, 2026, we recognized $19.9 million of current income tax expense related to enacted Pillar Two legislation. The related liability is included within income tax payable in the unaudited condensed 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
(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
Our revenues increased by $496.4 million, or 50.8%, to $1,474.5 million for the three months ended September 25, 2026, compared with $978.1 million for the three months ended September 26, 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 $777.1 million, or 52.7%, of our revenues for the three months ended September 25, 2026, increased by $339.5 million, or 77.6%, compared to the same period in the prior fiscal year. Revenues from communications infrastructure products, which represented $443.9 million, or 30.1%, of our revenues for the three months ended September 25, 2026, increased by $114.3 million, or 34.7%, compared to the same period in the prior fiscal year. Revenues from automotive, industrial and others products, which represented $253.4 million, or 17.2%, of our revenues for the three months ended September 25, 2026, increased by $42.5 million, or 20.1%, compared to the same period in the prior fiscal year.
Current report
Interest expense
Current report
Our interest expense increased by $0.2 million for the three months ended September 25, 2026, compared with the three months ended September 26, 2025. The increase was primarily due to a new term loan in August 2026.
Current report
Other income (expense), net
Current report
We recorded other expense, net of $21.6 million, or 1.5% of revenues, for the three months ended September 25, 2026, compared with other expense, net $0.1 million or 0.0% of revenues, for the three months ended September 26, 2025. The increase in other expense was primarily due to downward fair value adjustment of non-marketable equity securities of $21.5 million.
Current report
During the three months ended September 25, 2026, we borrowed $74.7 million of the term loan under our 2019 Credit Facility Agreement. As a result, as of September 25, 2026, we had a long-term borrowing of $74.7 million under our 2019 Credit Facility Agreement (see Note 11 of Notes to Unaudited Condensed Consolidated Financial Statements for further details). We anticipate that our internally generated working capital, along with our cash and cash equivalents will be adequate to repay these obligations. To better manage our cash on hand, we held short-term investments of $363.4 million as of September 25, 2026.
Removed paragraphs (14)
Previous report
Recent Developments
Previous report
On March 25, 2026, we entered into a share purchase agreement to acquire a 16.0% equity interest in Raytek Semiconductor, Inc. (“Raytek”) for approximately NT$1.02 billion ($32.4 million), subject to customary closing conditions. The investment will be accounted for as an equity security measured at cost, as we do not expect to have significant influence over the investee.
Previous report
•Notice on Perfecting Practices Concerning Foreign Exchange Settlement Regarding the Capital Contribution by Foreign-invested Enterprises, as promulgated by the State Administration of Foreign Exchange (“SAFE”), on August 29, 2008, or Circular 142.
Previous report
Circular 142 regulates the conversion by a foreign-invested company of foreign currency into RMB by restricting how the converted RMB may be used. Circular 142 requires that the registered capital of a foreign-invested enterprise settled in RMB converted from foreign currencies may only be used for purposes within the business scope approved by the applicable governmental authority and may not be used for equity investments within the PRC. In addition, SAFE strengthened its oversight of the flow and use of the registered capital of foreign-invested enterprises settled in RMB converted from foreign currencies. The use of such RMB capital may not be changed without SAFE’s approval and may not be used to repay RMB loans if the proceeds of such loans have not been used.
Previous report
(1)Datacenter interconnect (DCI) modules are opto-electronic modules used to connect two or more geographically separated data centers.
Previous report
(2)High-performance computing (HPC) products are massively parallel computing systems built from interconnected high-performance processors, accelerators, high-speed memory, and low-latency networking to solve complex, compute-intensive problems.
Previous report
Our revenues increased by $342.5 million, or 39.3%, to $1,214.3 million for the three months ended March 27, 2026, compared with $871.8 million for the three months ended March 28, 2025. 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 $888.7 million, or 73.2%, of our revenues for the three months ended March 27, 2026, increased by $231.5 million, or 35.2%, compared to the same period in the prior fiscal year, mainly due to an increase in revenues from telecommunication products and datacenter interconnect products during the three months ended March 27, 2026. Revenues from non-optical communications products, which represented $325.6 million, or 26.8%, of our revenues for the three months ended March 27, 2026, increased by $111.0 million, or 51.7%, compared to the same period in the prior fiscal year, primarily due to high demand for high-performance computing, and partially offset with a decrease in revenue from automotive.
Previous report
Our revenues increased by $815.7 million, or 32.5%, to $3,325.3 million for the nine months ended March 27, 2026, compared with $2,509.6 million for the nine months ended March 28, 2025. 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 $2,468.2 million, or 74.2%, of our revenues for the nine months ended March 27, 2026, increased by $537.5 million, or 27.8%, compared to the same period in the prior fiscal year, mainly due to an increase in revenues from telecommunication products and datacenter interconnect products, and partially offset with a decrease in revenues from data communication products during the nine months ended March 27, 2026. Revenues from non-optical communications products, which represented $857.1 million, or 25.8%, of our revenues for the nine months ended March 27, 2026, increased by $278.2 million, or 48.0%, compared to the same period in the prior fiscal year, primarily due to high demand for high-performance computing.
Previous report
Our cost of revenues increased by $719.2 million, or 32.6%, to $2,926.8 million, or 88.0% of revenues, for the nine months ended March 27, 2026, compared with $2,207.6 million, or 88.0% of revenues, for the nine months ended March 28, 2025. This increase was in line with the increase in sales volume.
Previous report
Our gross profit increased by $96.4 million, or 31.9%, to $398.5 million, or 12.0% of revenues, for the nine months ended March 27, 2026, compared with $302.1 million, or 12.0% of revenues, for the nine months ended March 28, 2025. The increase was primarily due to an increase in sales volume.
Previous report
Our SG&A expenses increased by $4.5 million, or 6.9%, to $69.8 million, or 2.1% of revenues, for the nine months ended March 27, 2026, compared with $65.3 million, or 2.6% of revenues, for the nine months ended March 28, 2025. The increase was primarily due to (1) an increase in information technology related expenses of $1.8 million, mainly from network, security system and new hardware costs, (2) an increase in executive compensation related expenses of $1.2 million, (3) an increase in share-based compensation expenses of $0.7 million, (4) an increase in R&D expenses of $0.3 million, (5) an increase in severance expenses of $0.3 million, and (6) a net increase in the allowance for expected credit losses of $0.2 million.
Previous report
Our operating income increased by $93.2 million, or 39.6%, to $328.6 million, or 9.9% of revenues, for the nine months ended March 27, 2026, compared with $235.4 million, or 9.4% of revenues, for the nine months ended March 28, 2025. The increase was primarily due to an increase in revenues.
Previous report
We recorded income before income taxes of $355.4 million for the nine months ended March 27, 2026, compared with $261.9 million for the nine months ended March 28, 2025.
Previous report
We recorded net income of $333.8 million, or 10.0% of revenues, for the nine months ended March 27, 2026, compared with $245.3 million, or 9.8% of revenues, for the nine months ended March 28, 2025.
Reworded paragraphs (30)
Previous wording
•our expectation that the portion of our revenues attributable to customers in regions outside of North America for the remainder of fiscal year 2026 will be in line with the portion of revenues attributable to such customers during the nine months ended March 27, 2026;
Current wording
•our expectation that the portion of our revenues attributable to customers in regions outside of North America for the remainder of fiscal year 2027 will be in line with the portion of revenues attributable to such customers during the three months ended September 25, 2026;
Previous wording
•trends in the optical communications, automotive, industrial lasers and other markets, including trends to outsource the production of components used in those markets;
Current wording
•trends in the data center, communications infrastructure, automotive, industrial lasers and other markets, including trends to outsource the production of components used in those markets;
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 53.8% in the three months ended March 28, 2025 to 47.9% in the three months ended March 27, 2026, primarily because of an increase in revenue from customers in the United States.
Current wording
The percentage of our revenues generated from a ship-to location outside of North America decreased from 76.3% in the three months ended September 26, 2025 to 75.4% in the three months ended September 25, 2026, primarily because of an increase in revenue from customers in the United States.
Previous wording
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 North America for the remainder of fiscal year 2026 will be in line with the portion of revenues attributable to such customers during the nine months ended March 27, 2026.
Current wording
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 North America for the remainder of fiscal year 2027 will be in line with the portion of revenues attributable to such customers during the three months ended September 25, 2026.
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 an increase in information technology related expenses and employee costs.
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.
Previous wording
The compensation committee of our board of directors approved a fiscal year 2026 executive incentive plan with quantitative objectives based solely on achieving certain revenue targets and non-GAAP operating margin targets for fiscal year 2026. Bonuses under the fiscal year 2025 executive incentive plan are payable after the end of fiscal year 2025. In fiscal year 2025, the compensation committee approved a fiscal year 2025 executive incentive plan with quantitative objectives that were based solely on achieving certain revenue targets and non-GAAP operating margin targets for fiscal year 2025.
Current wording
The compensation committee of our board of directors approved a fiscal year 2027 executive incentive plan with quantitative objectives based solely on achieving certain revenue targets and non-GAAP operating margin targets for fiscal year 2027. Bonuses under the fiscal year 2026 executive incentive plan were paid after the end of fiscal year 2026. In fiscal year 2026, the compensation committee approved a fiscal year 2026 executive incentive plan with quantitative objectives that were based solely on achieving certain revenue targets and non-GAAP operating margin targets for fiscal year 2026.
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 March 27, 2026, there was $253.0 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.
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, borrowings 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 September 25, 2026, there was $292.0 million of foreign currency forward contracts outstanding on the Thai baht payables. As of June 26, 2026, there was $280.0 million of foreign currency forward contracts outstanding on the Thai baht payables.
Previous wording
For the three months ended March 27, 2026 and March 28, 2025, we recorded an unrealized loss of $4.2 million and unrealized gain of $1.6 million, respectively, related to derivatives that are not designated as hedging instruments in the unaudited condensed consolidated statements of operations and comprehensive income.
Current wording
For the three months ended September 25, 2026 and September 26, 2025, we recorded an unrealized gain of $1.2 million and unrealized loss of $1.3 million, respectively, related to derivatives that are not designated as hedging instruments in the unaudited condensed consolidated statements of operations and comprehensive income.
Previous wording
•Foreign Currency Administration Rules, as amended on August 5, 2008, or the Exchange Rules;
Current wording
•Foreign Currency Administration Rules, as amended on August 5, 2008, or the Exchange Rules; and
Previous wording
•Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules; and
Current wording
•Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules.
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. 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 in the form of a corporate tax exemption on income generated from projects to manufacture certain products at our Chonburi campus was available to us through June 2026, followed by a 50% exemption between July 2026 and June 2031. 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. Preferential tax treatment will be available to us for products manufactured at our Navanakorn campus for 8 years beginning in August 2027, 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%.
Previous wording
The following table sets forth our revenues by end market and product category for the periods indicated.
Current wording
The following table presents revenues by end market and product category:
Previous wording
Comparison of Three and Nine Months Ended March 27, 2026 with Three and Nine Months Ended March 28, 2025
Current wording
Comparison of Three Months Ended September 25, 2026 with Three Months Ended September 26, 2025
Previous wording
Our cost of revenues increased by $300.4 million, or 39.0%, to $1,070.0 million, or 88.1% of revenues, for the three months ended March 27, 2026, compared with $769.6 million, or 88.3% of revenues, for the three months ended March 28, 2025. The increase was in line with the increase in sales volume.
Current wording
Our cost of revenues increased by $439.0 million, or 50.9%, to $1,300.7 million, or 88.2% of revenues, for the three months ended September 25, 2026, compared with $861.7 million, or 88.1% of revenues, for the three months ended September 26, 2025. This increase was in line with the increase in sales volume.
Previous wording
Our gross profit increased by $42.1 million, or 41.2%, to $144.3 million, or 11.9% of revenues, for the three months ended March 27, 2026, compared with $102.2 million, or 11.7% of revenues, for the three months ended March 28, 2025. The increase was primarily due to an increase in sales volume.
Current wording
Our gross profit increased by $57.4 million, or 49.3%, to $173.8 million, or 11.8% of revenues, for the three months ended September 25, 2026, compared with $116.4 million, or 11.9% of revenues, for the three months ended September 26, 2025. The increase was primarily due to an increase in sales volume.
Previous wording
Our SG&A expenses increased by $2.2 million, or 10.0%, to $24.3 million, or 2.0% of revenues, for the three months ended March 27, 2026, compared with $22.1 million, or 2.5% of revenues, for the three months ended March 28, 2025. The increase was primarily due to (1) an increase in severance expenses of $0.6 million, (2) an increase in R&D expenses of $0.5 million, (3) an increase in share-based compensation expenses of $0.4 million, (4) an increase in executive compensation related expenses of $0.4 million, and (5) an increase in information technology related expenses of $0.3 million.
Current wording
Our SG&A expenses increased by $4.5 million, or 20.3%, to $26.7 million, or 1.8% of revenues, for the three months ended September 25, 2026, compared with $22.2 million, or 2.3% of revenues, for the three months ended September 26, 2025. The increase was primarily due to (1) an increase in share-based compensation expenses of $1.5 million, (2) an increase in R&D expenses of $1.3 million, (3) an increase in executive compensation related expenses of $0.6 million, (4) an increase in sales and marketing expenses of $0.4 million, mainly from commission, (5) an increase in a net realized loss from financial instruments of $0.4 million, and (6) an increase in information technology related expenses of $0.3 million, primarily related to network and security systems.
Previous wording
We had no restructuring costs for the three and nine months ended March 27, 2026. We recorded restructuring and other related costs for the three and nine months ended March 28, 2025 of $1.3 million and $1.4 million, respectively, due to restructuring of operations in our subsidiary in Thailand.
Current wording
We recorded restructuring and other related costs for the three months ended September 25, 2026, of $1.0 million, due to restructuring in our subsidiary in Thailand. We had no restructuring costs for the three months ended September 26, 2025.
Previous wording
Our operating income increased by $41.1 million, or 52.1%, to $120.0 million, or 9.9% of revenues, for the three months ended March 27, 2026, compared with $78.9 million, or 9.0% of revenues, for the three months ended March 28, 2025. The increase was primarily due to an increase in revenues.
Current wording
Our operating income increased by $51.8 million, or 55.0%, to $146.0 million, or 9.9% of revenues, for the three months ended September 25, 2026, compared with $94.2 million, or 9.6% of revenues, for the three months ended September 26, 2025. The increase was primarily due to an increase in revenues.
Previous wording
Our interest income decreased by $2.7 million, or 26.7%, to $7.4 million, or 0.6% of revenues, for the three months ended March 27, 2026, compared with $10.1 million, or 1.2% of revenues, for the three months ended March 28, 2025. The decrease was primarily due to a decrease in average cash balance and short-term investment and a decrease of weighted average interest income rate during the three months ended March 27, 2026 compared to the same period in the prior fiscal year.
Current wording
Our interest income decreased by $3.9 million, or 41.5%, to $5.5 million, or 0.4% of revenues, for the three months ended September 25, 2026, compared with $9.4 million, or 1.0% of revenues, for the three months ended September 26, 2025. The decrease was primarily due to a decrease in average cash balance and short-term investment and a decrease of weighted average interest income rate during the three months ended September 25, 2026 compared to same period in the prior fiscal year.
Previous wording
We recorded foreign exchange gain, net of $7.0 million, or 0.6% of revenues, for the three months ended March 27, 2026, compared with foreign exchange loss, net of $2.7 million, or 0.3% of revenues, for the three months ended March 28, 2025. The foreign exchange gain was mainly due to (1) unrealized gain from revaluation of outstanding Thai baht assets and liabilities of $12.7 million, (2) unrealized gain from revaluation of currencies other than Thai baht of $2.4 million, and (3) lower foreign exchange loss, totaling $0.9 million from our subsidiaries in the PRC and the U.K, offset by (1) unrealized loss from mark-to-market forward contracts of $5.9 million, and (2) realized loss from payment/receipt of $0.4 million.
Current wording
We recorded foreign exchange loss, net of $0.2 million, or 0.0% of revenues, for the three months ended September 25, 2026, compared with foreign exchange loss, net of $2.1 million, or 0.2% of revenues, for the three months ended September 26, 2025. The decrease in foreign exchange loss was mainly due to (1) realized gain from payment/receipt of $3.0 million, and (2) unrealized gain from mark-to-market forward contracts of $2.5 million, offset by (1) unrealized loss from revaluation of outstanding Thai baht assets and liabilities of $2.5 million, (2) unrealized loss from revaluation of currencies other than Thai baht of $1.0 million, and (3) foreign exchange loss, totaling $0.1 million from our subsidiaries in the PRC and the U.K.
Previous wording
We recorded income before income taxes of $134.2 million for the three months ended March 27, 2026, compared with $86.3 million for the three months ended March 28, 2025.
Current wording
We recorded income before income taxes of $129.5 million for the three months ended September 25, 2026, compared with $101.4 million for the three months ended September 26, 2025.
Previous wording
Our provision for income tax reflects effective tax rates of 6.7% and 5.8% for the three months ended March 27, 2026 and March 28, 2025, respectively. The increase was due to an increase in income subject to tax.
Current wording
Our provision for income tax reflects effective tax rates of 20.1% and 5.4% for the three months ended September 25, 2026 and September 26, 2025, respectively. The increase was primarily due to top-up taxes under the Pillar Two Model Rules.
Previous wording
We recorded net income of $125.2 million, or 10.3% of revenues, for the three months ended March 27, 2026, compared with $81.3 million, or 9.3% of revenues, for the three months ended March 28, 2025.
Current wording
We recorded net income of $103.5 million, or 7.0% of revenues, for the three months ended September 25, 2026, compared with $95.9 million, or 9.8% of revenues, for the three months ended September 26, 2025.
Previous wording
We recorded other comprehensive loss of $14.9 million, or 1.2% of revenues, for the three months ended March 27, 2026, compared with other comprehensive income of $6.2 million, or 0.7% of revenues, for the three months ended March 28, 2025. The change was mainly due to (1) unrealized loss from mark-to-market of forward contracts of $13.7 million, (2) unrealized loss from mark-to-market of available-for-sale debt securities of $6.3 million, and (3) unrealized loss from foreign currency translation adjustment of $1.1 million.
Current wording
We recorded other comprehensive loss of $2.3 million, or 0.1% of revenues, for the three months ended September 25, 2026, compared with other comprehensive loss of $3.0 million, or 0.3% of revenues, for the three months ended September 26, 2025. The change was mainly due to (1) unrealized gain from mark-to-market of forward contracts of $3.9 million, and (2) unrealized gain from foreign currency translation adjustment of $0.1 million, offset by an increase in unrealized loss from mark-to-market of available-for-sale debt securities of $3.3 million.
Previous wording
We primarily finance our operations through cash flow from operating activities. As of March 27, 2026 and March 28, 2025, we had cash, cash equivalents, and short-term investments of $945.2 million and $950.7 million, respectively, and no outstanding debt.
Current wording
We primarily finance our operations through cash flow from operating activities. As of September 25, 2026 and September 26, 2025, we had cash, cash equivalents, and short-term investments of $755.8 million and $968.8 million, respectively, and outstanding debt of $74.7 million as of September 25, 2026.
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 was 3.6% and 3.8% for the three and nine months ended March 27, 2026, respectively, and 4.1% and 4.3% for the three and nine months ended March 28, 2025, 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 was 3.5% and 4.0% for the three months ended September 25, 2026 and September 26, 2025, respectively.
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 during the nine months ended March 27, 2026 as compared to the nine months ended March 28, 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 an increase in trade account payables aligned with the increasing volume of inventories.
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 during the three months ended September 25, 2026 as compared to the three months ended September 26, 2025 was primarily due to (1) an increase in trade receivables due to higher sales volume and timing of collection, and (2) an increase in inventories to support higher demand in the next quarter, partially offset by an increase in trade account payables aligned with the increasing volume of inventories.
Previous 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 the nine months ended March 27, 2026 as compared to cash used in investing activities for the nine months ended March 28, 2025 was primarily due to an increase in net proceeds of short-term investments, offset by an increase in capital expenditures related to the construction of a new manufacturing building at our Chonburi campus and support certain customers.
Current wording
Investing cash flows consist primarily of investment purchases, sales, maturities, and disposals; and capital expenditures. Cash provided by investing activities for the three months ended September 25, 2026 as compared to cash used in investing activities for the three months ended September 26, 2025 was primarily due to an increase in net proceeds of short-term investments, offset by an increase in capital expenditures related to purchase and construction of new facilities in U.S. and Thailand, respectively.
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 decrease in cash used in financing activities for the nine months ended March 27, 2026 as compared to the nine months ended March 28, 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.
Current wording
Financing cash flows consist primarily of proceeds from long-term borrowings, repayment of long-term borrowings, share repurchases, and withholding tax related to net share settlement of restricted share units. Cash provided by financing activities for the three months ended September 25, 2026 as compared to cash used in financing activities for the three months ended September 26, 2025 was primarily due to proceeds from long-term borrowings, offset by an increase in share repurchases and an increase in withholding tax related to net share settlement of restricted share units.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
In fiscal year 2027, we expect our SG&A expenses will increase compared with our fiscal year 2026 SG&A expenses, primarily due to an increase in research and development (R&D) expenses, information technology related expenses and employee costs.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
The percentage of our revenues generated from a bill-to location outside of North America decreased from 56.8% in the nine months ended March 28, 2025 to 52.3% in the nine months ended March 27, 2026, primarily because of an increase in revenue from customers in the United States.
Previous report — wording carried elsewhere
For the nine months ended March 27, 2026 and March 28, 2025, we recorded an unrealized loss of $4.3 million and unrealized gain of $0.6 million, respectively, related to derivatives that are not designated as hedging instruments in the unaudited condensed consolidated statements of operations and comprehensive income.
Previous report — wording carried elsewhere
Our interest income decreased by $7.0 million, or 21.6%, to $25.4 million, or 0.7% of revenues, for the nine months ended March 27, 2026, compared with $32.4 million, or 1.3% of revenues, for the nine months ended March 28, 2025. The decrease was primarily due to a decrease in average cash balance and short-term investment and a decrease of weighted average interest income rate during the nine months ended March 27, 2026 compared to same period in the prior fiscal year.
Previous report — wording carried elsewhere
We recorded foreign exchange gain, net of $1.7 million, or 0.1% of revenues, for the nine months ended March 27, 2026, compared with foreign exchange loss, net of $5.7 million, or 0.2% of revenues, for the nine months ended March 28, 2025. The foreign exchange gain was mainly due to (1) unrealized gain from revaluation of outstanding Thai baht assets and liabilities of $11.2 million, (2) unrealized gain from revaluation of currencies other than Thai baht of $2.5 million, and (3) lower foreign exchange loss, totaling $0.6 million from our subsidiaries in the PRC and the U.K, offset by (1) unrealized loss from mark-to-market forward contracts of $5.0 million, and (2) an increase realized loss from payment/receipt of $1.9 million.
Previous report — wording carried elsewhere
Our provision for income tax reflects effective tax rates of 6.1% and 6.3% for the nine months ended March 27, 2026 and March 28, 2025, respectively. The decrease was due to an increase in income not subject to tax.
Previous report — wording carried elsewhere
We recorded other comprehensive loss of $10.8 million, or 0.3% of revenues, for the nine months ended March 27, 2026, compared with other comprehensive income of $11.7 million, or 0.4% of revenues, for the nine months ended March 28, 2025. The change was mainly due to (1) unrealized loss from mark-to-market of available-for-sale debt securities of $11.0 million, (2) unrealized loss from mark-to-market of forward contracts of $10.3 million, and (3) unrealized loss from foreign currency translation adjustment of $1.2 million.