Fabrinet Hits Record Revenue, Net Income for Fifth Straight Year

TL;DR

**Fabrinet's fifth straight year of record revenue and net income, coupled with significant share repurchases, makes it a strong buy despite minor margin compression.**

AI Summary

Fabrinet (FN) achieved its fifth consecutive fiscal year of record revenue, net income, and net income per diluted share in fiscal 2025. The company reported revenue of $3,419.3 million, an 18.6% increase from $2,883.0 million in fiscal 2024. Net income rose by 12.3% to $332.5 million in fiscal 2025, up from $296.2 million in the prior year. Diluted net income per share also increased by 13.2% to $9.17 from $8.10. Despite these gains, GAAP gross margin slightly decreased by 30 basis points to 12.1%, and operating margin saw a 10 basis point reduction to 9.5%. Fabrinet actively managed its capital structure by repurchasing 561,858 ordinary shares for $125.7 million, offsetting dilution from equity incentive plans. The company's strategic outlook emphasizes continued pay-for-performance executive compensation and strong corporate governance, including a majority-independent board and annual shareholder outreach.

Why It Matters

Fabrinet's consistent record-breaking financial performance, including an 18.6% revenue increase to $3.419 billion, signals robust demand in its optical and electro-mechanical manufacturing sectors, which is critical for investors seeking growth in the technology supply chain. The $125.7 million share repurchase program demonstrates a commitment to shareholder value, potentially boosting EPS and stock price, while also indicating management's confidence. For employees, sustained growth often translates to job security and opportunities, though slight margin compression warrants monitoring. In a competitive landscape, Fabrinet's ability to achieve record results despite minor margin dips suggests strong operational efficiency and market positioning, impacting customers through reliable supply and potentially innovative product offerings.

Risk Assessment

Risk Level: low — Fabrinet's risk level is low due to its consistent financial performance, achieving its fifth successive fiscal year of record revenue, net income, and net income per diluted share. The company also actively managed dilution by repurchasing 561,858 ordinary shares for $125.7 million, demonstrating financial prudence and shareholder value focus.

Analyst Insight

Investors should consider Fabrinet's consistent growth and share repurchase program as indicators of a stable, well-managed company. Given the strong financial performance and commitment to shareholder returns, adding FN to a growth-oriented portfolio could be a prudent move.

Financial Highlights

revenue

$3,419.3 million

operating Margin

9.5%

net Income

$332.5 million

eps

$9.17

gross Margin

12.1%

revenue Growth

+18.6%

Executive Compensation

Key Numbers

• $3,419.3 million — Fiscal 2025 Revenue (18.6% increase from fiscal 2024)
• $2,883.0 million — Fiscal 2024 Revenue (Baseline for 18.6% growth to fiscal 2025)
• $332.5 million — Fiscal 2025 Net Income (12.3% increase from fiscal 2024)
• $296.2 million — Fiscal 2024 Net Income (Baseline for 12.3% growth to fiscal 2025)
• $9.17 — Fiscal 2025 Net Income per Diluted Share (13.2% increase from fiscal 2024)
• $8.10 — Fiscal 2024 Net Income per Diluted Share (Baseline for 13.2% growth to fiscal 2025)
• 561,858 — Ordinary Shares Repurchased (Offset dilution from equity incentive plans)
• $125.7 million — Aggregate Purchase Price for Share Repurchases (Used to repurchase 561,858 ordinary shares)
• 12.1% — Fiscal 2025 GAAP Gross Margin (Decreased by 30 basis points from fiscal 2024)
• 9.5% — Fiscal 2025 Operating Margin (Decreased by 10 basis points from fiscal 2024)

Key Players & Entities

• Fabrinet (company) — Registrant and company filing DEF 14A
• Seamus Grady (person) — Chief Executive Officer and Chairman of the Board of Directors
• PricewaterhouseCoopers ABAS Ltd. (company) — Independent registered public accounting firm for fiscal year ending June 26, 2026
• Dr. Homa Bahrami (person) — Class I Director nominee, Director since 2012
• Caroline Dowling (person) — Class I Director nominee, Director since 2025
• Kingsdale Advisors (company) — Proxy solicitation assistance provider
• Securities and Exchange Commission (regulator) — Regulator for DEF 14A filings
• Forbes I.J. Alexander (person) — Board Member
• Thomas F. Kelly (person) — Board Member
• Dr. Frank H. Levinson (person) — Board Member

FAQ

Risk Factors

• Reliance on Key Customers [high — operational]: Fabrinet's business is concentrated among a few key customers, with approximately 70% of its revenue derived from its top three customers in fiscal 2025. A significant reduction in orders from, or the loss of, any of these key customers could materially and adversely affect its business, financial condition, and results of operations.
• Manufacturing and Supply Chain Risks [medium — operational]: The company's manufacturing operations are complex and depend on the timely and cost-effective procurement of components and materials. Disruptions in the supply chain, including those related to geopolitical events or natural disasters, could impact production schedules and profitability.
• Compliance with Export Controls and Trade Regulations [medium — regulatory]: Fabrinet operates globally and is subject to various export control and trade regulations. Non-compliance could result in significant penalties, including fines and restrictions on business operations, impacting its ability to serve international markets.
• Foreign Currency Exchange Rate Fluctuations [medium — financial]: As a significant portion of its revenue and expenses are denominated in currencies other than the U.S. dollar, Fabrinet is exposed to foreign currency exchange rate fluctuations. Adverse movements in exchange rates could negatively impact its reported financial results.
• Intense Competition [medium — market]: The markets for optical components and modules are highly competitive, with numerous players offering similar products. Fabrinet faces competition from both established companies and emerging players, which could pressure pricing and market share.

Industry Context

Fabrinet operates in the highly competitive optical components and modules market, serving sectors like telecommunications, data centers, and industrial lasers. The industry is characterized by rapid technological advancements and significant capital investment requirements. Key trends include the increasing demand for high-speed data transmission and the growth of cloud computing, which drives demand for advanced optical solutions.

Regulatory Implications

Fabrinet is subject to various international trade and export control regulations due to its global operations. Compliance is critical to avoid significant penalties and maintain market access. Changes in trade policies or geopolitical tensions could also impact its supply chain and customer relationships.

What Investors Should Do

1. Review the Summary Compensation Table (page 48) for detailed executive compensation figures.
2. Analyze the 'Risk Factors' section for potential headwinds affecting future performance.
3. Vote 'FOR' Proposal 3: Advisory vote to approve named executive officer compensation.

Key Dates

• 2025-12-11: Annual General Meeting of Shareholders — Key date for shareholder voting on director elections, auditor ratification, and executive compensation advisory vote.
• 2025-10-16: Record Date for Annual Meeting — Establishes the shareholders eligible to vote at the December 11, 2025 Annual Meeting.
• 2025-06-26: Fiscal Year End 2025 — The period for which the reported financial results and compensation data are presented.

Glossary

DEF 14A

A proxy statement filed by a public company with the U.S. Securities and Exchange Commission (SEC) detailing information about the annual meeting of shareholders, including proposals to be voted on and executive compensation. (This document provides the detailed information analyzed, including executive compensation, corporate governance, and shareholder proposals.)

GAAP

Generally Accepted Accounting Principles. A common set of accounting standards and procedures used in financial reporting in the United States. (Used to report Fabrinet's financial performance, such as gross margin and net income, which showed slight decreases despite revenue growth.)

Named Executive Officers (NEOs)

The top executive officers of a company, typically including the CEO, CFO, and other top-level executives, whose compensation is disclosed in detail in proxy statements. (Their compensation is a key focus of the DEF 14A, with details on pay-for-performance alignment and specific compensation components.)

Say-on-Pay

A shareholder advisory vote on the compensation of a company's named executive officers. It is non-binding but provides shareholders with a voice on executive pay. (Fabrinet has provided this vote since 2012 and notes shareholder support, highlighting the company's engagement on compensation matters.)

Ordinary Shares

The common stock of a company, representing ownership and typically carrying voting rights. (Fabrinet's share repurchase program involves repurchasing these ordinary shares to offset dilution, as noted in the fiscal 2025 highlights.)

Year-Over-Year Comparison

Fabrinet has demonstrated continued strong financial performance, achieving its fifth consecutive year of record revenue, net income, and diluted EPS in fiscal 2025. Revenue grew by 18.6% year-over-year to $3,419.3 million, and net income increased by 12.3% to $332.5 million. However, this growth was accompanied by a slight decrease in both GAAP gross margin (down 30 bps to 12.1%) and operating margin (down 10 bps to 9.5%). The company also continued its share repurchase program, buying back 561,858 ordinary shares for $125.7 million to offset dilution.

Key Financial Figures

• $125.7 m — gram for an aggregate purchase price of $125.7 million, which offset dilution from issua
• $3,419.3 million — 25 (1) Fiscal 2024 Change Revenue $3,419.3 million $2,883.0 million 18.6% GAAP gross m
• $2,883.0 million — 24 Change Revenue $3,419.3 million $2,883.0 million 18.6% GAAP gross margin 12.1% 12.4
• $332.5 million — 10.6% (10 basis points) Net income $332.5 million $296.2 million 12.3% Non-GAAP net i
• $296.2 million — s points) Net income $332.5 million $296.2 million 12.3% Non-GAAP net income (2) $368
• $368.8 million — lion 12.3% Non-GAAP net income (2) $368.8 million $324.6 million 13.6% Net income per
• $324.6 million — n-GAAP net income (2) $368.8 million $324.6 million 13.6% Net income per diluted share
• $9.17 — 13.6% Net income per diluted share $9.17 $8.10 13.2% Non-GAAP net income per
• $8.10 — Net income per diluted share $9.17 $8.10 13.2% Non-GAAP net income per dilute
• $10.17 — GAAP net income per diluted share (2) $10.17 $8.88 14.5% Closing share price (on
• $8.88 — income per diluted share (2) $10.17 $8.88 14.5% Closing share price (on busine
• $285.23 — nouncement of fiscal year-end results) $285.23 $268.00 6.4% (1) Please see the sec
• $268.00 — t of fiscal year-end results) $285.23 $268.00 6.4% (1) Please see the section titl

Filing Documents

• ny20055128x1_def14a.htm (DEF 14A) — 1993KB
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• ny20055128x1_pc01.jpg (GRAPHIC) — 575KB
• ny20055128x1_pc02.jpg (GRAPHIC) — 522KB
• 0001140361-25-039008.txt ( ) — 8268KB
• fn-20251211.xsd (EX-101.SCH) — 3KB
• fn-20251211_def.xml (EX-101.DEF) — 2KB
• ny20055128x1_def14a_htm.xml (XML) — 199KB

Executive Compensation Program Highlights

Executive Compensation Program Highlights 4 QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND PROCEDURAL MATTERS 7 How can I attend the Annual Meeting? 7 Can shareholders ask questions during the Annual Meeting? 7 Who is entitled to vote at the Annual Meeting? 7 Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials? 7 What proposals will be voted on at the Annual Meeting? 8 How does the Board of Directors recommend that I vote? 8 What is the voting requirement to approve each of the proposals and how are votes counted? 8 How many shares must be present or represented to conduct business at the Annual Meeting? 8 How can I vote my shares during the Annual Meeting? 9 How can I vote my shares without attending the Annual Meeting? 9 What is the difference between holding shares as a shareholder of record and as a beneficial owner? 9 What happens if additional matters are presented at the Annual Meeting? 10 Can I change my vote? 10 What happens if I decide to attend the Annual Meeting but I have already voted or submitted a proxy card covering my shares? 10 What should I do if I receive more than one set of voting materials? 10 Is my vote confidential? 10 Where can I find the voting results of the Annual Meeting? 10 Who will bear the cost of soliciting votes for the Annual Meeting? 11 What is the deadline to propose actions for consideration at next year's annual meeting of shareholders or to nominate individuals to serve as directors? 11 How may I obtain a separate set of proxy materials or the Fiscal 2025 Annual Report? 12 Whom do I contact if I have questions? 12 Page FISCAL YEAR END 13 PROPOSAL ONE: ELECTION OF DIRECTORS 14 General 14 Nominees for Director 14 Recommendation of the Board of Directors 14 Biographical Information 15 DIRECTOR COMPENSATION 20 Annual N

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION 36 Compensation Discussion and Analysis 36 Compensation and Risk Assessment 47 Compensation Committee Report 47 Summary Compensation Table 48 Grants of Plan-Based Awards in Fiscal 2025 50 Outstanding Equity Awards at Fiscal 2025 Year-End 51 Option Exercises and Shares Vested in Fiscal 2025 52 Potential Payments Upon Termination or Change of Control 53 ADDITIONAL COMPENSATION MATTERS 60 CEO Pay Ratio 60 Pay Versus Performance Disclosure 60 Policies and Practices Related to the Grant of Certain Equity Awards 64 Page CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 65 Related Party Transactions 65 Policy for Approval of Related Party Transactions 65

SECURITY OWNERSHIP BY PRINCIPAL SHAREHOLDERS AND MANAGEMENT

SECURITY OWNERSHIP BY PRINCIPAL SHAREHOLDERS AND MANAGEMENT 66 EQUITY COMPENSATION PLAN INFORMATION 67 DELINQUENT SECTION 16(a) REPORTS 67 OTHER MATTERS 67 APPENDIX A – GAAP TO NON-GAAP RECONCILIATION A-1 TABLE OF CONTENTS 2025 PROXY STATEMENT SUMMARY 2025 Annual Meeting Date: Thursday, December 11, 2025 Time: 9:00 a.m. Pacific Standard Time Location: Online via the Internet at www.virtualshareholdermeeting.com/FN2025 Record Date: October 16, 2025 Voting: Shareholders as of the record date are entitled to vote. Shareholders may cast one vote for each ordinary share held by them as of the record date on all matters properly presented at the Annual Meeting. At the close of business on the record date, there were 35,826,315 ordinary shares outstanding and entitled to vote at the Annual Meeting, as well as 3,875,048 ordinary shares outstanding and held as treasury shares (which are not entitled to vote). Admission to Meeting: You are entitled to attend the Annual Meeting online, vote and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/FN2025 and entering the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, voting instruction form or proxy card (if you requested printed materials). You will only be entitled to vote and submit questions at the Annual Meeting if you are a shareholder as of the record date. Matters to Be Voted on at the Annual Meeting Matter Board Recommendation Page Reference for More Information Proposal 1: Election of two Class I directors " FOR " each nominee Page 14 Proposal 2: Ratification of the appointment of PricewaterhouseCoopers ABAS Ltd. as Fabrinet's independent auditor for the fiscal year ending June 26, 2026 " FOR " Page 32 Proposal 3: Advisory vote to approve named executive officer compensation " FOR " Page 33 Class I Director Nominees: Terms to Expire in 2028 Name Director Since Experience and Qua

Business

Business Development & Strategy Information Security Other Public Co. Board Experience Forbes I.J. Alexander Dr. Homa Bahrami Caroline Dowling Seamus Grady Thomas F. Kelly Dr. Frank H. Levinson 2025 PROXY STATEMENT 3 TABLE OF CONTENTS 2025 PROXY STATEMENT SUMMARY

Executive Compensation Program Highlights

Executive Compensation Program Highlights Our executive compensation program is designed to be heavily weighted towards compensating our executives based on company performance. To that end, we have implemented executive compensation policies and practices that reinforce our pay-for-performance philosophy and align with commonly viewed best practices and sound governance principles. What We Do Pay-for-performance, with significant portion of compensation at risk Caps on performance-based incentive compensation Multi-year performance periods Clawback policy on cash and equity incentive compensation Share ownership guidelines for executive officers and directors 100% independent directors on the Compensation Committee Independent compensation consultant engaged by the Compensation Committee Annual review and approval of our compensation strategy Engagement with shareholders Annual shareholder advisory vote on executive compensation What We Don't Do No targeting specific percentiles No guaranteed bonus No changing of multi-year targets after they are set No repricing or buyouts of equity awards No share "recycling" No short sales, hedging, or pledging of our ordinary shares No transactions involving derivatives of our ordinary shares No paying dividends or dividend equivalents on unvested equity awards Shareholder Engagement and Advisory Vote on Executive Compensation We have conducted shareholder outreach annually since 2016 and have provided shareholders with an annual say-on-pay advisory vote on compensation of our named executive officers since 2012. We are very pleased that shareholders have expressed their continued support of our compensation practices since our 2016 annual general meeting of shareholders. ' 4 2025 PROXY STATEMENT TABLE OF CONTENTS 2025 PROXY STATEMENT SUMMARY Pay for Performance We use a mix of long-term and short-term compensation components to align executive interests with shareholders a

View Full Filing

View this DEF 14A filing on SEC EDGAR