Fabrinet (FN) — Agentic Tribune

ITEM 1.BUSINESS.

Overview

We provide advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers (“OEMs”) of complex products such as optical communication components, modules and sub-systems, industrial lasers, automotive components, medical devices and sensors. We offer a broad range of advanced optical and electro-mechanical capabilities across the entire manufacturing process, including process design and engineering, supply chain management, manufacturing, complex printed circuit board assembly, advanced packaging, integration, final assembly and testing. We are capable of producing a wide variety of high complexity products in any mix and any volume. Based on our extensive experience and the positive feedback we have received from our customers, we believe we are a global leader in providing these services to the optical communications, automotive, and industrial lasers markets.

Our customer base includes companies in complex industries that require advanced precision manufacturing capabilities such as optical communications, automotive, industrial lasers, medical, and sensors. Our customers in these industries support a growing number of end-markets, including automotive, biotechnology, communications, materials processing, medical devices, metrology and semiconductor processing. In many cases, we are the sole outsourced manufacturing partner used by our customers for the products that we manufacture for them.

Our revenues for the year ended June 27, 2025 (“fiscal year 2025”) increased by $536.3 million, or 18.6%, from $2.88 billion for the year ended June 28, 2024 (“fiscal year 2024”) to $3.42 billion for fiscal year 2025. Our percentage of revenues from optical communications products decreased from 79.4% in fiscal year 2024 to 76.6% in fiscal year 2025, while our percentage of revenues from automotive, industrial lasers, and other markets increased from 20.6% in fiscal year 2024 to 23.4% in fiscal year 2025.

The products that we manufacture for our OEM customers include:

•optical communications devices, such as:

•selective switching products, such as reconfigurable optical add-drop multiplexers (“ROADMs”), optical amplifiers, modulators and other optical components and modules that collectively enable network managers to route voice, video and data communications traffic through fiber optic cables at various wavelengths, speeds, and over various distances;

•tunable lasers, transceivers, and transponders that eliminate, at a significant cost savings to the service provider, the need to stock individual fixed wavelength optical transceivers and transponders used in voice and data communications networks; and

•active optical cables providing high-speed interconnect capabilities for data centers and computing clusters, as well as Infiniband, Ethernet, fiber channel and optical backplane connectivity;

•solid state, diode-pumped, gas and fiber lasers (collectively referred to as “industrial lasers”) used across a broad array of industries, including semiconductor processing (wafer inspection, wafer dicing, wafer scribing), biotechnology and medical device (DNA sequencing, flow cytometry, hematology, antibody detection), metrology (instrumentation, calibration, inspection), and material processing (metal, polymer, textile drilling and cutting, annealing, marking, engraving, and welding); and

•sensors, including differential pressure, micro-gyro, fuel and other sensors that are used in automobiles, and non-contact temperature measurement sensors for the medical industry.

We also design and fabricate application-specific crystals, lenses, prisms, mirrors, laser components and substrates (collectively referred to as “customized optics”) and other custom and standard borosilicate, clear fused quartz, and synthetic fused silica glass products (collectively referred to as “customized glass”). We incorporate our customized optics and glass into many of the products we manufacture for our OEM customers, and we also sell customized optics and glass in the merchant market.

We believe we offer differentiated manufacturing services through our optical and electro-mechanical process technologies and our strategic alignment with our customers. Our dedicated process and design engineers, who have a deep knowledge in materials sciences and physics, are able to tailor our service offerings to accommodate our customers’ complex engineering assignments. Our range of capabilities, from the design of customized optics and glass through process engineering

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and testing of finished assemblies, provides us with a knowledge base that we believe often leads to improvements in our customers’ product development cycles, manufacturing cycle times, quality and reliability, manufacturing yields and end product costs. We offer an efficient, technologically advanced and flexible manufacturing infrastructure designed to enable the scale production of a wide variety of high complexity products in any mix and any volume. We specialize in complex prototype and new product introduction services, with specialized resources to meet customers’ quick-turn printed circuit board assembly (“PCBA”) and early stage manufacturing requirements. We have a dedicated engineering team to support the advanced optical packaging needs of our customers’ cutting edge products, which allows them to accelerate development and time-to-market for such products. We often provide a “factory-within-a-factory” manufacturing environment to safeguard our customers’ intellectual property by physically segregating certain key employees and manufacturing space from the resources we use for other customers. We also provide our customers with a customized software platform to monitor all aspects of the manufacturing process, enabling our customers to remotely access our databases to monitor yields, inventory positions, work-in-progress status and vendor quality data in real time. We believe there is no other manufacturing services provider with a similar breadth and depth of optical and electro-mechanical engineering and process technology capabilities that does not directly compete with its customers in their end-markets. As a result, we believe we are more closely aligned and better able to develop long-term relationships with our customers than our competitors are.

As of June 27, 2025, our facilities comprised approximately 3.7 million total square feet, including approximately 0.8 million square feet of office space used for general administration purposes and approximately 2.9 million square feet devoted to manufacturing and related activities, of which approximately 1.0 million square feet are clean room facilities. Of the aggregate square footage of our facilities, approximately 3.3 million square feet are located in Thailand and the remaining balance is located in the People’s Republic of China (“PRC” or “China”), the United States, Israel and the Cayman Islands. See Part I, Item 2. Properties of this Annual Report on Form 10-K.

Industry Background

Optical Communications

Many optical communications OEMs have reduced internal manufacturing capacity and transitioned to a low-cost and more efficient manufacturing base. By outsourcing production to third parties, OEMs are better able to concentrate their efforts and resources on what they believe are their core strengths, such as research and development, and sales and marketing. Additionally, outsourcing production often allows OEMs to reduce product costs, improve quality, access advanced process design and manufacturing technologies and achieve accelerated time-to-market and time-to-volume production. The principal barrier to the trend towards outsourcing in the optics industry has been the shortage of third-party manufacturing partners with the necessary optical process capabilities and robust intellectual property protection.

Demand for optical communications components and modules is influenced by the level and rate of development of optical communications infrastructure and carrier and enterprise network expansion, as well as rapid expansion of data center infrastructures. Carrier demand for optical communications network equipment has increased as a direct result of higher network utilization and increased demand for bandwidth capacity. The increase in network traffic volumes has been driven by increasing demand for voice, data and video services delivered over wired and wireless Internet protocol, or IP, networks. The bandwidth demands for data center access have been largely driven by social media applications and cloud services and continue to increase very rapidly.

Automotive, Industrial Lasers, and Others

The optical and electro-mechanical process technologies used in the optical communications market also have applications in other similarly complex end-markets that require advanced precision manufacturing capabilities, such as automotive, industrial lasers, medical, and sensors. These markets are substantially larger than the optical communications components and modules market. We expect growth in the automotive, industrial lasers, medical, and sensors markets will be driven by demand for:

•industrial laser applications across a growing number of end-markets, particularly in semiconductor processing, biotechnology, metrology and materials processing;

•precision, non-contact and low power requirement sensors, particularly in automotive, medical and industrial end-markets; and

•lower cost products used on both enterprise and consumer levels.

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Outsourcing of production by industrial laser and sensor OEMs has historically been limited. We believe industrial laser and sensor OEMs are increasingly recognizing the benefits of outsourcing that OEMs in other industries, such as optical communications, have been able to achieve.

Our Competitive Strengths

We believe we have succeeded in providing differentiated services to the optical communications, automotive, industrial lasers, medical, and sensors industries due to our long-term focus on optical and electro-mechanical process technologies, strategic alignment with our customers, and commitment to total customer satisfaction. More specifically, our key competitive strengths include:

•Advanced Optical and Electro-Mechanical Manufacturing Technologies: We believe that our optical and electro-mechanical process technologies and capabilities as well as our customized optics and glass technologies provide us with a key competitive advantage. These technologies include:

•advanced optical and precision packaging;

•reliability and environmental testing;

•optical and mechanical material and process analysis;

•precision optical fiber and electro-mechanical assembly;

•complex printed circuit board assembly;

•customized software tools for manufacturing high complexity products in any mix and any volume;

•turn-key manufacturing systems;

•fiber metallization and lensing;

•fiber handling and fiber alignment;

•crystal growth and processing;

•precision lapping and polishing;

•precision glass drawing; and

•optical coating.

•Efficient, Flexible and Low-Cost Process Engineering and Manufacturing Platform: We enable our customers to transition their production to an efficient and flexible manufacturing platform that is specialized for the production of optics and similarly complex products and is located in a low-cost geography. We believe our advanced manufacturing technologies, coupled with our broad engineering capabilities, give us the ability to identify opportunities to improve our customers’ manufacturing processes and provide meaningful production cost benefits. We have also developed a series of customized software tools that we believe provide us with a specialized ability to manage the unique aspects of the production of a wide variety of high complexity products in any mix and any volume.

•Customizable Factory-Within-a-Factory Production Environment: We offer our customers exclusive engineering teams and manufacturing space for production. We call this concept of segregating production by customer a “factory-within-a-factory.” We believe our approach maximizes intellectual property protection and provides greater opportunities to reduce cost and improve time to market for our customers’ products.

•Vertical Integration Targeting Customized Optics and Glass: We believe our capabilities in the design and fabrication of high-value customized optics and glass are complementary to our manufacturing services. Specifically, these capabilities enable us to strategically align our business to our customers’ needs by streamlining our customers’ product development process and reducing the number of suppliers in our customers’ manufacturing supply chains. Also, we use these customized optics and glass products in certain of the components, modules and subsystems we manufacture, which enables us to shorten time to market and reduce the cost for our customers. We believe this level of vertical integration positions us to capitalize on further opportunities to cross-sell our design and fabrication capabilities.

•Turn-Key Supply Chain Management: We have created a proprietary set of automated manufacturing resource planning tools designed specifically to address the unique inventory management demands of the production of a wide variety of high complexity products in any mix and any volume. Over the years, we have developed strong relationships with thousands of suppliers and implemented inventory management strategies with many of them,

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which enables us to obtain inventory on an as-needed basis and provide on-site stocking programs. We believe our deep expertise, relationships and capabilities in supply chain and materials management often allows us to further reduce costs and cycle times for our customers.

Our Growth Strategy

The key elements of our growth strategy are to:

•Strengthen Our Presence in the Optical Communications Market:

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-Q filed 2026-05-05 (period ending 2026-03-27).

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

•our goals and strategies;

•our and our customers’ estimates regarding future revenues, operating results, expenses, capital requirements and liquidity;

•our belief that we will be able to maintain favorable pricing on our services;

•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;

•our expectation that our fiscal year 2026 selling, general and administrative (“SG&A”) expenses will increase compared to our fiscal year 2025 SG&A expenses;

•our expectation that our employee costs will increase in Thailand and the PRC;

•our future capital expenditures, including the expansion of our manufacturing capacity;

•the growth rates of our existing markets and potential new markets;

•our ability, and the ability of our customers and suppliers, to respond successfully to technological or industry developments;

•our expectations regarding the potential impact of macroeconomic conditions and international political instability on our business, financial condition and operating results;

•our suppliers’ estimates regarding future costs;

•our ability to increase our penetration of existing markets and to penetrate new markets;

•our plans to diversify our sources of revenues;

•our plans to execute acquisitions;

•trends in the optical communications, automotive, industrial lasers and other markets, including trends to outsource the production of components used in those markets;

•our ability to attract and retain a qualified management team and other qualified personnel and advisors; and

•competition in our existing and new markets.

These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q, in particular, the risks discussed under the heading “Risk Factors” in Part II, Item 1A as well as those discussed in other documents we file with the Securities and Exchange Commission. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. “We,” “us” or “our” collectively refer to Fabrinet and its subsidiaries.

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Overview

Our customer base includes companies in complex industries that require advanced precision manufacturing capabilities such as optical communications, automotive, industrial lasers, medical, and sensors. The products that we manufacture for our OEM customers include selective switching products; tunable lasers, transponders and transceivers; active optical cables; solid state, diode-pumped, gas and fiber lasers; and sensors. In many cases, we are the sole outsourced manufacturing partner used by our customers for the products that we manufacture for them.

We also design and fabricate application-specific crystals, lenses, prisms, mirrors, laser components, and substrates (collectively referred to as “customized optics”) and other custom and standard borosilicate, clear fused quartz, and synthetic fused silica glass products (collectively referred to as “customized glass”). We incorporate our customized optics and glass into many of the products we manufacture for our OEM customers, and we also sell customized optics and glass in the merchant market.

Recent Developments

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.

Revenues

We believe we are able to expand our relationships with existing customers and attract new customers due to, among other factors, our broad range of complex engineering and manufacturing service offerings, flexible low-cost manufacturing platform, process optimization capabilities, advanced supply chain management, excellent customer service, and experienced management team. Although we expect the prices we charge for our manufactured products to decrease over time (partly as a result of competitive market forces), we believe we will be able to continue to maintain favorable pricing for our services because of our ability to reduce cycle time, adjust our product mix by focusing on more complicated products, improve product quality and yields, and reduce material costs for the products we manufacture. We believe these capabilities have enabled us to help our OEM customers reduce their manufacturing costs while maintaining or improving the design, quality, reliability, and delivery times for their products.

Revenues by Geography

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.

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.

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.

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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.

The following table presents percentages of total revenues by geographic region:

	Three Months Ended				Nine Months Ended
	March 27, 2026		March 28, 2025		March 27, 2026		March 28, 2025
North America	52.1	%	46.2	%	47.7	%	43.2	%
Asia-Pacific and others	37.4		45.9		42.3		49.0
Europe	10.5		7.9		10.0		7.8
	100.0	%	100.0	%	100.0	%	100.0	%

Our Contracts

We enter into supply agreements with our customers which generally have an initial term of up to three years, subject to automatic renewals for subsequent one-year terms unless expressly terminated. Although there are no minimum purchase requirements in our supply agreements, our customers provide us with rolling forecasts of their demand requirements. Our supply agreements generally include provisions for pricing and periodic review of pricing, consignment of our customer’s unique production equipment to us, and the sharing of benefits from cost-savings derived from our efforts. We are generally required to purchase materials, which may include long lead-time materials and materials that are subject to minimum order quantities and/or non-cancelable or non-returnable terms, to meet the stated demands of our customers. After procuring materials, we manufacture products for our customers based on purchase orders that contain terms regarding product quantities, delivery locations and delivery dates. Our customers generally are obligated to purchase finished goods that we have manufactured according to their demand requirements. Materials that are not consumed by our customers within a specified period of time, or that are no longer required due to a product’s cancellation or end-of-life, are typically designated as excess or obsolete inventory under our contracts. Once materials are designated as either excess or obsolete inventory, our customers are typically required to purchase such inventory from us even if they have chosen to cancel production of the related products. The excess or obsolete inventory is shipped to the customer and recognized as an offset against cost of revenue upon shipment.

Cost of Revenues

The key components of our cost of revenues are material costs, employee costs, and infrastructure-related costs. Material costs generally represent the majority of our cost of revenues. Several of the materials we require to manufacture products for our customers are customized for their products and often sourced from a single supplier or in some cases, our own subsidiaries. Shortages from sole-source suppliers due to yield loss, quality concerns and capacity constraints, among other factors, may increase our expenses and negatively impact our gross profit margin or total revenues in a given quarter. Material costs include scrap material. Historically, scrap rate diminishes during a product’s life cycle due to process, fixturing and test improvement and optimization.

A second significant element of our cost of revenues is employee costs, including indirect employee costs related to design, configuration and optimization of manufacturing processes for our customers, quality testing, materials testing and other engineering services, and direct costs related to our manufacturing employees. Direct employee costs include employee salaries, insurance and benefits, merit-based bonuses, recruitment, training and retention. Historically, our employee costs have increased primarily due to increases in the number of employees necessary to support our growth and, to a lesser extent, costs to recruit, train and retain employees. Our cost of revenues is significantly impacted by salary levels in Thailand and the PRC, the fluctuation of the Thai baht and RMB against our functional currency, the U.S. dollar, and our ability to retain our employees. We expect our employee costs to increase as wages continue to increase in Thailand and the PRC. Wage increases may impact our ability to sustain our competitive advantage and may reduce our profit margin. We seek to mitigate these cost increases through improvements in employee productivity, employee retention and asset utilization.

Our infrastructure costs are comprised of depreciation, utilities, facilities management and overhead costs. Most of our facility leases are long-term agreements. Our depreciation costs include buildings and fixed assets, primarily at our Pinehurst and Chonburi campuses in Thailand, and capital equipment located at each of our manufacturing locations.

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Selling, General and Administrative Expenses

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.

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.

Additional Financial Disclosures

Foreign Exchange

As a result of our international operations, we are exposed to foreign exchange risk arising from various currency exposures, and primarily with respect to the Thai baht. Although a majority of our total revenues is denominated in U.S. dollars, a substantial portion of our payroll plus certain other operating expenses are incurred and paid in Thai baht. The exchange rate between the Thai baht and the U.S. dollar has fluctuated substantially in recent years and may continue to fluctuate substantially in the future. We report our financial results in U.S. dollars and our results of operations have been and could in the future be negatively impacted if the Thai baht appreciates against the U.S. dollar. Smaller portions of our expenses are incurred in a variety of other currencies, including RMB, GBP, Canadian dollars, Euros, and Japanese yen, the appreciation of which may also negatively impact our financial results.

In order to manage the risks arising from fluctuations in foreign currency exchange rates, we use derivative instruments. We may enter into foreign currency exchange forward or put option contracts to manage foreign currency exposures associated with certain assets and liabilities and other forecasted foreign currency transactions and may designate these instruments as hedging instruments. The forward and put option contracts generally have maturities of up to 12 months. All foreign currency exchange contracts are recognized in the unaudited condensed consolidated balance sheets at fair value. Gains or losses on our forward and put option contracts generally present gross amount in the assets, liabilities, and transactions economically hedged.

We had foreign currency denominated assets and liabilities in Thai baht, RMB and GBP as follows:

	As of March 27, 2026					As of June 27, 2025
(in thousands, except percentages)	Foreign Currency	$		%		Foreign Currency	$		%
Assets
Thai baht	1,340,453	40,719		78.0	%	1,812,680	55,689		86.3	%
RMB	62,563	9,049		17.4		43,637	6,092		9.4
GBP	1,804	2,408		4.6		2,031	2,790		4.3
Total		$	52,176	100.0	%		$	64,571	100.0	%
Liabilities
Thai baht	5,881,607	178,664		93.5	%	4,434,661	136,242		91.5	%
RMB	84,938	12,285		6.4		89,583	12,507		8.4
GBP	107	143		0.1		106	146		0.1
Total		$	191,092	100.0	%		$	148,895	100.0	%

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.

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The RMB assets represent cash and cash equivalents, trade accounts receivable, other receivables, and other current assets. The RMB liabilities represent trade accounts payable, accrued expenses, income tax payable, accrued payroll, bonus and related expenses, and other payables. As of March 27, 2026 and June 27, 2025, we did not have any derivative contracts denominated in RMB.

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 March 27, 2026 and June 27, 2025, we did not have any derivative contracts denominated in GBP.

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.

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.

Currency Regulation and Dividend Distribution

Foreign exchange regulation in the PRC is primarily governed by the following rules:

•Foreign Currency Administration Rules, as amended on August 5, 2008, or the Exchange Rules;

•Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules; and

•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.

Under the Exchange Rules, RMB is freely convertible into foreign currencies for current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions. However, conversion of RMB for capital account items, such as direct investments, loans, security investments and repatriation of investments, is still subject to the approval of SAFE.

Under the Administration Rules, foreign-invested enterprises may only buy, sell, or remit foreign currencies at banks authorized to conduct foreign exchange business after providing valid commercial documents and relevant supporting documents and, in the case of capital account item transactions, obtaining approval from SAFE. Capital investments by foreign-invested enterprises outside of the PRC are also subject to limitations, which include approvals by the Ministry of Commerce, SAFE and the State Development and Reform Commission.

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.

On January 5, 2007, SAFE promulgated the Detailed Rules for Implementing the Measures for the Administration on Individual Foreign Exchange, or the Implementation Rules. Under the Implementation Rules, PRC citizens who are granted share options by an overseas publicly-listed company are required, through a PRC agent or PRC subsidiary of such overseas publicly-listed company, to register with SAFE and complete certain other procedures.

In addition, the General Administration of Taxation has issued circulars concerning employee share options. Under these circulars, our employees working in the PRC who exercise share options will be subject to PRC individual income tax. Our PRC subsidiary has obligations to file documents related to employee share options with relevant tax authorities and withhold individual income taxes of those employees who exercise their share options.

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Furthermore, our transfer of funds to our subsidiaries in Thailand and the PRC are each subject to approval by governmental authorities in case of an increase in registered capital, or subject to registration with governmental authorities in case of a shareholder loan. These limitations on the flow of funds between our subsidiaries and us could restrict our ability to act in response to changing market conditions.

Income Tax

Our effective tax rate is a function of the mix of tax rates in the various jurisdictions in which we do business. We are domiciled in the Cayman Islands. Under the current laws of the Cayman Islands, we are not subject to tax in the Cayman Islands on income or capital gains until March 6, 2039.

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%.

As of March 27, 2026, the corporate income tax rates for our subsidiaries in the PRC, the U.S., the U.K. and Israel are 25%, 21%, 25% and 23%, respectively.

Our deferred income tax assets represent temporary differences between the carrying amount and the tax basis of existing assets and liabilities that will result in deductible and payable amounts in future years, including net operating loss carry forwards. Based on estimates, the carrying value of our net deferred tax assets assumes that it is more likely than not that we will be able to generate sufficient future taxable income in certain tax jurisdictions to realize these deferred income tax assets. Our judgments regarding future profitability may change depending on future market conditions, changes in U.S. or international tax laws, or other factors. If these estimates and related assumptions change in the future, we may be required to increase or decrease our valuation allowance against the deferred tax assets, resulting in additional or lesser income tax expense.

Critical Accounting Policies and Use of Estimates

We prepare our unaudited condensed consolidated financial statements in conformity with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the financial reporting period. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and on various other assumptions that we believe to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Because the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We consider the policies discussed below to be critical to an understanding of our unaudited condensed consolidated financial statements, as their application places the most significant demands on our management’s judgment.

Our critical accounting policies are disclosed in our Annual Report on Form 10-K for the fiscal year ended June 27, 2025. The adoption of new accounting policies and accounting standards are disclosed in Note 2 to the unaudited condensed consolidated financial statements. There were no changes to our accounting policies.

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Results of Operations

The following table sets forth a summary of our unaudited condensed consolidated statements of operations and comprehensive income. Note that period-to-period comparisons of operating results should not be relied upon as indicative of future performance.

(in thousands)	Three Months Ended				Nine Months Ended
	March 27, 2026		March 28, 2025		March 27, 2026		March 28, 2025
Revenues	$	1,214,293	$	871,799	$	3,325,309	$	2,509,635
Cost of revenues	(1,069,954)		(769,616)		(2,926,849)		(2,207,577)
Gross profit	144,339		102,183		398,460		302,058
Selling, general and administrative expenses	(24,295)		(22,063)		(69,822)		(65,300)
Restructuring and other related costs	—		(1,264)		—		(1,367)
Operating income	120,044		78,856		328,638		235,391
Interest income	7,421		10,145		25,393		32,392
Foreign exchange gain (loss), net	6,989		(2,675)		1,715		(5,728)
Other income (expense), net	(212)		(30)		(351)		(111)
Income before income taxes	134,242		86,296		355,395		261,944
Income tax expense	(9,029)		(5,006)		(21,628)		(16,624)
Net income	125,213		81,290		333,767		245,320
Other comprehensive income (loss), net of tax	(14,940)		6,200		(10,795)		11,690
Net comprehensive income	$	110,273	$	87,490	$	322,972	$	257,010

The following table sets forth a summary of our unaudited condensed consolidated statements of operations and comprehensive income as a percentage of revenues for the periods indicated.

	Three Months Ended				Nine Months Ended
	March 27, 2026		March 28, 2025		March 27, 2026		March 28, 2025
Revenues	100.0	%	100.0	%	100.0	%	100.0	%
Cost of revenues	(88.1)		(88.3)		(88.0)		(88.0)
Gross profit	11.9		11.7		12.0		12.0
Selling, general and administrative expenses	(2.0)		(2.5)		(2.1)		(2.6)
Restructuring and other related costs	—		(0.2)		—		(0.0)
Operating income	9.9		9.0		9.9		9.4
Interest income	0.6		1.2		0.7		1.3
Foreign exchange gain (loss), net	0.6		(0.3)		0.1		(0.2)
Other income (expense), net	(0.0)		(0.0)		(0.0)		(0.0)
Income before income taxes	11.1		9.9		10.7		10.5
Income tax expense	(0.8)		(0.6)		(0.7)		(0.7)
Net income	10.3		9.3		10.0		9.8
Other comprehensive income (loss), net of tax	(1.2)		0.7		(0.3)		0.4
Net comprehensive income	9.1	%	10.0	%	9.7	%	10.2	%

Table of Contents

The following table sets forth our revenues by end market and product category for the periods indicated.

(in thousands, except percentages)	Three Months Ended March 27, 2026		As a % of Total Revenues		Nine Months Ended March 27, 2026		As a % of Total Revenues
Optical communications
Telecom	$	431,366			$	1,179,334
Datacom	260,442				811,680
Datacenter interconnect (1)	196,896				477,176
Total revenue - Optical communications	$	888,704	73.2	%	$	2,468,190	74.2	%
Non-optical communications
Automotive	$	115,499			$	354,403
High-performance computing (2)	106,746				207,705
Industrial laser	44,171				125,282
Others	59,173				169,729
Total revenue - Non-optical communications	$	325,589	26.8	%	$	857,119	25.8	%
Total revenue	$	1,214,293	100.0	%	$	3,325,309	100.0	%

(in thousands, except percentages)	Three Months Ended March 28, 2025		As a % of Total Revenues		Nine Months Ended March 28, 2025		As a % of Total Revenues
Optical communications
Telecom	$	302,736			$	776,373
Datacom	251,105				879,087
Datacenter interconnect (1)	103,390				275,236
Total revenue - Optical communications	$	657,231	75.4	%	$	1,930,696	76.9	%
Non-optical communications
Automotive	$	129,468			$	336,456
Industrial laser	40,464				113,332
Others	44,636				129,151
Total revenue - Non-optical communications	$	214,568	24.6	%	$	578,939	23.1	%
Total revenue	$	871,799	100.0	%	$	2,509,635	100.0	%

(1)Datacenter interconnect (DCI) modules are opto-electronic modules used to connect two or more geographically separated data centers.

(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.

Comparison of Three and Nine Months Ended March 27, 2026 with Three and Nine Months Ended March 28, 2025

Revenues

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.

Table of Contents

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.

Cost of revenues

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.

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.

Gross profit

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.

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.

SG&A expenses

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holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Recent insider activity

Last 90 days. Open-market trades (purchases & sales) by directors, officers, and 10%+ owners. 1 transaction across 1 insider. Net: -2,500 shares, -$1,779,775.

Date	Insider	Role	Action	Shares	Price	Value
2026-05-22	Bahrami Homa	Director	Sell	-2,500	$711.91	-$1,779,775

Source: SEC Form 4 filings.

Next expected filings

~2026-08-18 10-K expected by 2026-08-25 (in 64 days)
~2026-11-03 10-Q expected by 2026-11-04 (in 141 days)
~2027-02-02 10-Q expected by 2027-02-03 (in 232 days)
~2027-05-04 10-Q expected by 2027-05-05 (in 323 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-05-05 10-Q Quarterly Report
2026-05-04 8-K Earnings Release; Financial Statements and Exhibits
2026-02-03 10-Q Quarterly Report
2026-02-02 8-K Earnings Release; Financial Statements and Exhibits
2025-11-04 10-Q Quarterly Report
2025-11-03 8-K Earnings Release; Financial Statements and Exhibits
2025-10-17 8-K Officer/Director Change; Financial Statements and Exhibits
2025-10-16 8-K Officer/Director Change; Financial Statements and Exhibits
2025-08-19 10-K Annual Report
2025-08-18 8-K Earnings Release; Officer/Director Change; Financial Statements and Exhibits
2025-05-27 8-K Officer/Director Change
2025-05-06 10-Q Quarterly Report
2025-05-05 8-K Earnings Release; Financial Statements and Exhibits
2025-03-13 8-K Material Agreement Entered; Unregistered Equity Sale; Regulation FD Disclosure; Financial Statements and Exhibits
2025-02-04 10-Q Quarterly Report

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