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What changed in Fabrinet's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Fabrinet's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+209 added−212 removedSource: 10-K (2025-08-19) vs 10-K (2024-08-20)

Top changes in Fabrinet's 2025 10-K

209 paragraphs added · 212 removed · 176 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeSocial Responsibility Our corporate social responsibility practices focus on creating better social, economic and environmental outcomes for all stakeholders in the global electronics supply chain. These outcomes include improved conditions for workers, increased efficiency and productivity for customers and suppliers, economic development, and a clean environment for our communities.
Biggest changeIn future years, the Pillar Two framework for the global minimum tax may increase the level of income tax in both Thailand and other foreign jurisdictions where we operate or have a presence. Social Responsibility Our corporate social responsibility practices focus on creating better social, economic and environmental outcomes for all stakeholders in the global electronics supply chain.
Of the aggregate square footage of our facilities, approximately 3.2 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.
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.
In addition to providing yield, manufacturing data tracking and other information, our data tracking system also performs process route checking to ensure that the products follow correct process steps, and the test results meet all specified criteria.
In addition to providing yield, manufacturing data tracking and other information, our data tracking system also performs process route checking to ensure that products follow the correct process steps and that test results meet all specified criteria.
We have historically experienced supply shortages resulting from various causes, including reduced yields by our suppliers, which have prevented us from manufacturing products for our customers in a timely manner.
We have historically experienced supply shortages resulting from various causes, including reduced yields by suppliers, which have prevented us from manufacturing products for our customers in a timely manner.
We also maintain compliance with various additional standards imposed by the U.S. Food and Drug Administration ("FDA") with respect to the manufacture of medical devices. Additionally, we are required to register with the FDA and other regulatory bodies and are subject to continual review and periodic inspection for compliance with various regulations, including testing, quality control and documentation procedures.
We also maintain compliance with various additional standards imposed by the U.S. Food and Drug Administration (“FDA”) with respect to the manufacture of medical devices. Additionally, we are required to register with the FDA and other regulatory bodies and are subject to continual review and periodic inspection for compliance with various regulations, including testing, quality control and documentation procedures.
We generally purchase materials from our suppliers through standard purchase orders, as opposed to long-term supply agreements. We rely on sole-source suppliers for a number of critical materials. Some of these sole-source suppliers are small businesses, which presents risks to us based on their financial health and reliability, which we continually monitor.
We generally purchase materials from suppliers through standard purchase orders, as opposed to long-term supply agreements. We rely on sole-source suppliers for a number of critical materials. Some of these sole-source suppliers are small businesses, which presents risks to us based on their financial health and reliability, which we continually monitor.
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 low-volume, high-mix manufacturing; • 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.
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.
The reliability laboratory is critical to verification of root cause failure analysis. • Optical and Mechanical Material and Process Analysis: Our in-house material and process laboratory analyzes materials to support incoming inspection, process development, process monitoring, failure analysis and verification of compliance with the applicable environmental standards. • Precision Optical Fiber and Electro-Mechanical Assembly: We have extensive experience in precision optical and electro-mechanical assemblies in clean room environments, clean room control discipline, cleaning technologies and electro-static discharge (“ESD”) protection. • Fiber Metallization and Lensing: We use our fiber metallization and fiber lensing capabilities to assist our customers in packaging their products.
The reliability laboratory is critical to verification of root cause failure analysis. • Optical and Mechanical Material and Process Analysis: Our in-house material and process laboratory analyzes materials to support incoming inspection, process development, process monitoring, failure analysis and verification of compliance with the applicable environmental standards. 9 Table of Contents • Precision Optical Fiber and Electro-Mechanical Assembly: We have extensive experience in precision optical and electro-mechanical assemblies in clean room environments, clean room control discipline, cleaning technologies and electro-static discharge (“ESD”) protection. • Fiber Metallization and Lensing: We use our fiber metallization and fiber lensing capabilities to assist our customers in packaging their products.
We intend to focus on expanding our client base in Europe, Asia-Pacific, the Middle East and the United States.
We intend to continue our focus on expanding our client base in Europe, Asia-Pacific, the Middle East and the United States.
We maintain the following certifications: ISO 9001 for Manufacturing Quality Management Systems; ISO 14001 for Environmental Management Systems; TL 9000 for Telecommunications Industry Quality Certification; IATF 16949 for Automotive Industry Quality Certification; ISO 13485 for Medical Devices Industry Quality Certification; AS 9100 for Aerospace Industry Quality Certification; NADCAP (National Aerospace and Defense Contractors Accreditation Program) for Quality Assurance throughout the Aerospace and Defense Industries; ISO 45001 for Occupational Health and Safety Management Systems; ISO/IEC 17025 for Testing and Calibration Laboratories Certification; and ISO 22301 for Business Continuity Management Systems.
We maintain the following certifications: ISO 9001 for Manufacturing Quality Management Systems; ISO 14001 for Environmental Management Systems; TL 9000 for Telecommunications Industry Quality Certification; IATF 16949 for Automotive Industry Quality Certification; ISO 13485 for Medical Devices Industry Quality Certification; AS 9100 for Aerospace Industry Quality Certification; NADCAP (National Aerospace and Defense Contractors Accreditation Program) for Quality Assurance throughout the Aerospace and Defense Industries; ISO 45001 for Occupational Health and Safety Management Systems; ISO/IEC 17025 for Testing and Calibration Laboratories Certification; ISO 22301 for Business Continuity Management Systems; and ISO/IEC 27001 for Information Security Management Systems.
Our manufacturing execution system (“MES”) is directly integrated with our test system 8 Table of Contents and enterprise resource planning (“ERP”) database allowing us to respond to any process deviations in real time. We work with customers to develop product-specific test strategies. We also provide a variety of test management services, including material and process testing and reliability testing.
Our manufacturing execution system (“MES”) is directly integrated with our test system and enterprise resource planning (“ERP”) database allowing us to respond to any process deviations in real time. We work with customers to develop product-specific test strategies. We also provide a variety of test management services, including material and process testing and reliability testing.
Our range of capabilities, from the design of customized optics and glass through process engineering 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.
Our range of capabilities, from the design of customized optics and glass through process engineering 4 Table of Contents 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.
Intellectual Property Our success depends, in part, on our ability to protect our customers’ intellectual property. We license various technologies from our customers on a non-exclusive, royalty-free, non-transferable basis for the sole purpose of allowing us to manufacture products for those customers in accordance with their specifications.
(a subsidiary of Coherent Corp.). Intellectual Property Our success depends, in part, on our ability to protect our customers’ intellectual property. We license various technologies from our customers on a non-exclusive, royalty-free, non-transferable basis for the sole purpose of allowing us to manufacture products for those customers in accordance with their specifications.
We have inter-company agreements with certain of our subsidiaries in Thailand and the U.S. to provide manufacturing services to us, and we have inter-company agreements with certain of our subsidiaries in the U.S. and Singapore to provide certain administrative and business development services to us. Human Capital Resources Our workforce is distributed globally over six countries.
We have an inter-company agreement with our subsidiary in Thailand to provide manufacturing services to us, and we have inter-company agreements with certain of our subsidiaries in the U.S. and Singapore to provide certain administrative and business development services to us. Human Capital Resources Our workforce is distributed globally over six countries.
Over the years, we have developed strong relationships with thousands of suppliers and implemented inventory management strategies with many of them, which enables us to obtain inventory on an as-needed basis and provide on-site stocking programs.
Over the years, we have developed strong relationships with thousands of suppliers and implemented inventory management strategies with many of them, 6 Table of Contents which enables us to obtain inventory on an as-needed basis and provide on-site stocking programs.
As of June 28, 2024, our facilities comprised approximately 3.7 million total square feet, including approximately 0.9 million square feet of office space used for general administration purposes and approximately 2.8 million square feet devoted to manufacturing and related activities, of which approximately 1.0 million square feet are clean room facilities.
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.
Historically, patents have not played a significant role in the protection of our proprietary rights. Nevertheless, we currently have a relatively small number of solely-owned and jointly-held PRC patents in various customized optic technologies with expiration dates between 2024 and 2044.
Historically, patents have not played a significant role in the protection of our proprietary rights. Nevertheless, we currently have a relatively small number of solely-owned and jointly-held PRC patents in various customized optic technologies with expiration dates between 2025 and 2040.
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 4 Table of Contents engineering assignments.
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.
We believe our deep expertise, relationships and capabilities 6 Table of Contents in supply chain and materials management often allows us to further reduce costs and cycle times for our customers.
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.
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 low-volume, high-mix production. • Customizable Factory-Within-a-Factory Production Environment: We offer our customers exclusive engineering teams and manufacturing space for production.
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 offer an efficient, technologically advanced and flexible manufacturing infrastructure designed to enable the scale production of low-volume, high-mix products, as well as high-volume products. 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 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.
Many optical component package designs require metallized fiber and 9 Table of Contents some designs also require lensing at the tip of the fiber.
Many optical component package designs require metallized fiber and some designs also require lensing at the tip of the fiber.
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 “low-volume, high-mix” manufacturing.
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.
Our advanced packaging team develops and maintains generic recipes that are readily available to be tailored and refined for the specific new applications of our customers, which helps to further accelerate prototype development and product delivery time.
We maintain a real-time roadmap for the packaging requirements of our customers and the industry in general. Our advanced packaging team develops and maintains generic recipes that are readily available to be tailored and refined for the specific new applications of our customers, which helps to further accelerate prototype development and product delivery time.
Therefore, we expect a significant percentage of our revenues will continue to come from a small number of customers. During fiscal years 2024 and 2023, we had two and four customers, respectively, that each contributed 10% or more of our revenues. During fiscal year 2024, Nvidia Corporation and Cisco Systems Inc. contributed 35.1%, and 13.4%, respectively, of our revenues.
Therefore, we expect a significant percentage of our revenues will continue to come from a small number of customers. During fiscal years 2025 and 2024, we had two customers that each contributed 10% or more of our revenues. During fiscal year 2025, NVIDIA Corporation and Cisco Systems, Inc. contributed 27.6% and 18.2%, respectively, of our revenues.
We often transfer production from a customer’s internal prototype or production lines to our own facilities, requiring a copy-exact: the setup of a production process identical to the one used by our customer to minimize the number of variables and expedite qualification. 7 Table of Contents Advanced Optical Packaging We have a dedicated team of experienced engineers supporting our advanced optical packaging development capabilities.
We often transfer production from a 7 Table of Contents customer’s internal prototype or production lines to our own facilities, requiring a copy-exact: the setup of a production process identical to the one used by our customer to minimize the number of variables and expedite qualification.
Our percentage of revenues from optical communications products increased from 75.9% in fiscal year 2023 to 79.4% in fiscal year 2024, while our percentage of revenues from automotive, industrial lasers, and other markets decreased from 24.1% in fiscal year 2023 to 20.6% in fiscal year 2024.
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.
Competitors in the market for optical manufacturing services include Benchmark Electronics, Inc., Celestica Inc., Sanmina-SCI Corporation, Jabil Circuit, Inc. and Venture Corporation Limited, as well as the internal manufacturing capabilities of our customers. Our customized optics and glass operations face competition from companies such as Fujian Castech Crystals, Inc., Photop Technologies, Inc. and Research Electro-Optic, Inc.
Competitors in the market for optical manufacturing services include Benchmark Electronics, Inc., Celestica Inc., InnoLight Technology (Suzhou) Ltd., Jabil Inc., Sanmina Corporation and Venture Corporation Limited, as well as the internal manufacturing capabilities of our customers. Our customized optics and glass operations face competition from companies such as CASTECH Inc., Excelitas Technologies Corp. and Photop Technologies, Inc.
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 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.
None of our employees are represented by a labor union. We have not experienced any work stoppages, slowdowns, or strikes. We consider our relations with our employees to be positive. We are committed to developing our employees and supporting our employees’ well-being and safety. We advertise job openings and source candidates broadly to attract a diverse candidate pool.
None of our employees 13 Table of Contents are represented by a labor union. We have not experienced any work stoppages, slowdowns, or strikes. We consider our relations with our employees to be positive. We are committed to developing our employees and supporting our employees’ well-being and safety.
We hold the following additional certifications: ANSI ESD S20.20 for facilities and manufacturing process control, in compliance with ESD standard; Transported Asset Protection Association ("TAPA") and Custom and Trade Partnership Against Terrorism ("C-TPAT") for Logistic Security Management System; and CSR-DIW for Corporate Social Responsibility in Thailand.
We hold the following additional certifications: ANSI ESD S20.20 for facilities and manufacturing process control; Transported Asset Protection Association (“TAPA”) and Customs Trade Partnership Against Terrorism (“CTPAT”) for logistics security and management; and CSR-DIW for corporate social responsibility in Thailand.
These highly qualified engineers work closely with our customers to understand the development requirements of their new products and assist them to build prototypes, as well as source materials, optimize manufacturing processes and develop schedules to bring these products to volume production. We maintain a real-time roadmap for the packaging requirements of our customers and the industry in general.
Advanced Optical Packaging We have a dedicated team of experienced engineers supporting our advanced optical packaging development capabilities. These highly qualified engineers work closely with our customers to understand the development requirements of their new products and assist them to build prototypes, as well as source materials, optimize manufacturing processes and develop schedules to bring these products to volume production.
As of June 28, 2024, we employed approximately 14,213 full-time employees worldwide, with approximately 13,973 employees located in the Asia-Pacific region, and 240 employees located in North America. Of our total workforce, approximately 13,761 employees were involved in manufacturing operations and 452 employees were involved in business development and general and administrative functions.
As of June 27, 2025, we employed approximately 16,457 full-time employees worldwide, with approximately 16,220 employees located in the Asia-Pacific region, and 237 employees located in North America. Of our total workforce, approximately 16,012 employees were involved in manufacturing operations and 445 employees were involved in business development and general and administrative functions.
Available Information Our website is located at www.fabrinet.com. The information posted on our website is not incorporated into this Annual Report on Form 10-K.
We provide employee career guidance and counseling through established employee development and training opportunities. Available Information Our website is located at www.fabrinet.com. The information posted on our website is not incorporated into this Annual Report on Form 10-K.
We are committed to implementing programs that focus on driving continuous improvements in social, ethical, and environmental compliance throughout all of our global operating units in accordance with our Code of Business Conduct.
These outcomes include improved conditions for workers, increased efficiency and productivity for customers and suppliers, economic development, and a clean environment for our communities. We are committed to implementing programs that focus on driving continuous improvements in social, ethical, and environmental compliance throughout all of our global operating units in accordance with our Code of Business Conduct.
Quality Control We believe the integration of our manufacturing and test controls, quality systems, and software platforms contribute significantly to our ability to deliver high-quality products on a consistent basis and reduce the risk that we will be required to repair or replace defective products.
We have also implemented inventory management strategies with certain suppliers that enable us to use inventory on an as-needed basis and provide on-site stocking programs. 8 Table of Contents Quality Control We believe the integration of our manufacturing and test controls, quality systems, and software platforms contribute significantly to our ability to deliver high-quality products on a consistent basis and reduce the risk that we will be required to repair or replace defective products.
We also monitor hiring, termination and pay 13 Table of Contents practices to ensure compliance with established regulations across the world, and we track and report internally on key talent metrics including talent pipeline, employee promotions, employee turnover, and engagement of our employees. We provide employee career guidance and counseling through established employee development and training opportunities.
We advertise job openings and source candidates broadly to attract a diverse candidate pool. We also monitor hiring, termination and pay practices to ensure compliance with established regulations across the world, and we track and report internally on key talent metrics including talent pipeline, employee promotions, employee turnover, and engagement of our employees.
Our revenues for the year ended June 28, 2024 (“fiscal year 2024”) increased by $237.8 million, or 9.0%, from $2.65 billion for the year ended June 30, 2023 (“fiscal year 2023”) to $2.88 billion for fiscal year 2024.
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.
In particular, the qualification and field testing of the products that we produce for our customers may take three to six months or longer to complete. Generally, we must qualify our production process with our customers, and the products that we manufacture must also meet the product quality requirements of our customers’ customers.
Generally, we must qualify our production process with our customers, and the products that we manufacture must also meet the product quality requirements of our customers’ customers.
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. Our customers in these industries support a growing number of end-markets, including automotive, biotechnology, communications, materials processing, medical devices, metrology and semiconductor processing.
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.
During fiscal year 2023, Cisco Systems Inc., Lumentum Operations LLC, Nvidia Corporation, and Infinera Corporation contributed 15.6%, 15.4%, 12.5%, and 12.4%, respectively, of our revenues. The production of optical devices is characterized by a lengthy qualification process.
During fiscal year 2024, NVIDIA Corporation and Cisco Systems, Inc. contributed 35.1% and 13.4%, respectively, of our revenues. The production of optical devices is characterized by a lengthy qualification process. In particular, the qualification and field testing of the products that we produce for our customers may take three to six months or longer to complete.
There have been a number of proposed changes in the tax laws that could increase our tax liability. The Organization for Economic Co-operation and Development (OECD) announced that it has reached agreement among its member countries to implement Pillar Two rules, a global minimum tax at 15% for certain multinational enterprises.
There have been a number of proposed changes in the tax laws that could increase our tax liability. As part of the Organization for Economic Cooperation and Development’s (“OECD”) Inclusive Framework on Base Erosion and Profit Shifting, over 140 countries have joined a two-pillar plan to reform international taxation rules.
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We focus primarily on low-volume production of a wide variety of high complexity products, which we refer to as “low-volume, high-mix.” We also have the capability to accommodate high-volume production.
Added
The first pillar is focused on the allocation of taxing rights between countries for in-scope multinational enterprises that sell goods and services into countries with little or no local physical presence and is intended to apply to multinational enterprises with global revenues above €20 billion.
Removed
In many cases, we are the sole outsourced manufacturing partner used by our customers for the products that we manufacture for them.
Added
The second pillar is focused on developing a global minimum tax rate of at least 15% applicable to in-scope multinational enterprises and is intended to apply to multinational enterprises with annual consolidated group revenue in excess of €750 million. The OECD has issued Pillar Two model rules and continues to release guidance on these rules.
Removed
We have also implemented inventory management strategies with certain suppliers that enable us to use inventory on an as-needed basis and provide on-site stocking programs.
Added
As of June 27, 2025, 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, and there was no material impact to our tax provision for the year ended June 27, 2025.
Removed
While we continually undertake programs to strengthen our supply chain, we are experiencing, and expect to experience for the foreseeable future, strain on our supply chain, as well as periodic supplier problems.
Removed
The OECD has issued Pillar Two model rules and continues to release guidance on these rules. Many jurisdictions have enacted tax laws that will take effect in 2024 and 2025 to implement Pillar Two rules. Other countries have announced plans to adopt tax laws to implement similar legislation with varying effective dates in the future.
Removed
Certain jurisdictions in which we operate have not adopted corresponding legislation to date. These changes could increase tax uncertainty and may adversely affect our provision for income taxes and operating results. We will continue to monitor legislative and regulatory developments to assess the impact on our business, financial condition and operating results.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese competitors may also engage in more extensive research and development, undertake more far-reaching marketing campaigns, adopt more aggressive pricing policies or offer services that achieve greater market acceptance than ours. These competitors may also compete with us by making more attractive offers to our existing and potential employees, suppliers, and strategic partners.
Biggest changeThese advantages may allow them to devote greater resources than we can to the development and promotion of service offerings that are similar or superior to our service offerings. These competitors may also engage in more extensive research and development, undertake more far-reaching marketing campaigns, adopt more aggressive pricing policies or offer services that achieve greater market acceptance than ours.
The export of certain technologies from the United States, the United Kingdom and other nations to the PRC is barred by applicable export controls, and similar prohibitions could be extended to Thailand, thereby limiting our ability to manufacture certain products.
The export of certain technologies from the United States and other nations to the PRC is barred by applicable export controls, and similar prohibitions could be extended to Thailand, thereby limiting our ability to manufacture certain products.
Based upon estimates of the value of our assets, which are based in part on the trading price of our ordinary shares, we do not expect to be a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes for the taxable year 2024 or for the foreseeable future.
Based upon estimates of the value of our assets, which are based in part on the trading price of our ordinary shares, we do not expect to be a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes for the taxable year 2025 or for the foreseeable future.
As a manufacturer of products for the optics industry, we are required to meet certain certification standards, including the following: ISO 9001 for Manufacturing Quality Management Systems; ISO 14001 for Environmental Management Systems; TL 9000 for Telecommunications Industry Quality Certification; IATF 16949 for Automotive Industry Quality Certification; ISO 13485 for Medical Devices Industry Quality Certification; AS 9100 for Aerospace Industry Quality Certification; NADCAP (National Aerospace and Defense Contractors Accreditation Program) for Quality Assurance throughout the Aerospace and Defense Industries; ISO 45001 for Occupational Health and Safety Management Systems; ISO/IEC 17025 for Testing and Calibration Laboratories Certification; and ISO 22301 for Business Continuity Management Systems.
As a manufacturer of products for the optics industry, we are required to meet certain certification standards, including the following: ISO 9001 for Manufacturing Quality Management Systems; ISO 14001 for Environmental Management Systems; TL 9000 for Telecommunications Industry Quality Certification; IATF 16949 for Automotive Industry Quality Certification; ISO 13485 for Medical Devices Industry Quality Certification; AS 9100 for Aerospace Industry Quality Certification; NADCAP (National Aerospace and Defense Contractors Accreditation Program) for Quality Assurance throughout the Aerospace and Defense Industries; ISO 45001 for Occupational Health and Safety Management Systems; ISO/IEC 17025 for Testing and Calibration Laboratories Certification; ISO 22301 for Business Continuity Management Systems; and ISO/IEC 27001 for Information Security Management Systems.
However, despite our expectations, we cannot guarantee that we will not become a PFIC for the taxable year 2024 or any future year because our PFIC status is determined at the end of each year and depends on the composition of our income and assets during such year.
However, despite our expectations, we cannot guarantee that we will not become a PFIC for the taxable year 2025 or any future year because our PFIC status is determined at the end of each year and depends on the composition of our income and assets during such year.
This may make it more difficult for our shareholders to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest. 29 Table of Contents Subject to limited exceptions, under Cayman Islands law, a minority shareholder may not bring a derivative action against the board of directors.
This may make it more difficult for our shareholders to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest. Subject to limited exceptions, under Cayman Islands law, a minority shareholder may not bring a derivative action against the board of directors.
Compliance with these rules has resulted in additional cost and expense, including for due diligence to determine and verify the sources of any conflict minerals used in the products we manufacture, and may result in additional costs of remediation and other changes to processes or sources of supply as a consequence of such verification activities.
Compliance with these rules has resulted in additional cost and expense, including for due diligence to determine and verify the sources of any conflict minerals used in the products we manufacture, and may result in additional costs of remediation and other changes to processes or 27 Table of Contents sources of supply as a consequence of such verification activities.
Demand for consumer electronics surged during the COVID-19 pandemic and remains strong, which in turn has increased the demand for semiconductors. At the same time, wafer foundries that support chipmakers have not invested enough in recent years to increase capacities to the levels needed to support the increased demand from all of their customers.
Demand for consumer electronics surged during the COVID-19 pandemic, which in turn has increased the demand for semiconductors. At the same time, wafer foundries that support chipmakers have not invested enough in recent years to increase capacities to the levels needed to support the increased demand from all of their customers.
Fabrinet (the “Cayman 25 Table of Contents Islands Parent”) is an exempted company incorporated in the Cayman Islands. We maintain manufacturing operations in Thailand, the PRC, the U.S. and Israel. We cannot determine in advance the extent to which some jurisdictions may require us to pay taxes or make payments in lieu of taxes.
Fabrinet (the “Cayman Islands Parent”) is an exempted company incorporated in the Cayman Islands. We maintain manufacturing operations in Thailand, the PRC, the U.S. and Israel. We cannot determine in advance the extent to which some jurisdictions may require us to pay taxes or make payments in lieu of taxes.
If the arrangement and reconstruction is thus approved, the dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of a corporation incorporated in a jurisdiction in the U.S., providing rights to receive payment in cash for the judicially determined value of the shares.
If the arrangement and reconstruction is thus approved, the dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of a corporation incorporated in a 29 Table of Contents jurisdiction in the U.S., providing rights to receive payment in cash for the judicially determined value of the shares.
If our customers do not believe that we have sufficient manufacturing capacity, they may: (1) outsource all of their production to another manufacturer that they believe can fulfill all of their production requirements; (2) look to a second manufacturer for the manufacture of additional quantities of the products that we currently manufacture for them; (3) manufacture the products themselves; or (4) decide against using our services for their new products. 18 Table of Contents Most recently, we expanded our manufacturing capacity by building a new facility at our Chonburi campus in Thailand in 2022.
If our customers do not believe that we have sufficient manufacturing capacity, they may: (1) outsource all of their production to another manufacturer that they believe can fulfill all of their production requirements; (2) look to a second manufacturer for the manufacture of additional quantities of the products that we currently manufacture for them; (3) manufacture the products themselves; or (4) decide against using our services for their new products. 18 Table of Contents We most recently expanded our manufacturing capacity by building a new facility at our Chonburi campus in Thailand in 2022, and we began construction of a new manufacturing building at our Chonburi campus in February 2025.
Our investment portfolio may become impaired by deterioration of the capital markets. We use professional investment management firms to manage our excess cash and cash equivalents. Our short-term investments as of June 28, 2024 are primarily investments in a fixed income portfolio, including liquidity funds, certificates of deposit and time deposits, corporate debt securities, and U.S. agency and U.S.
Our investment portfolio may become impaired by deterioration of the capital markets. We use professional investment management firms to manage our excess cash and cash equivalents. Our short-term investments as of June 27, 2025 are primarily investments in a fixed income portfolio, including liquidity funds, certificates of deposit and time deposits, corporate debt securities, and U.S. agency and U.S.
If we become a PFIC, our U.S. investors will be subject to increased tax liabilities under U.S. tax laws and regulations as well as burdensome reporting requirements. Our business and share price could be negatively affected as a result of activist shareholders.
If we become a PFIC, our U.S. investors will be subject to increased tax liabilities under U.S. tax laws and regulations as well as burdensome reporting requirements. 28 Table of Contents Our business and share price could be negatively affected as a result of activist shareholders.
As of June 28, 2024, we did not record any impairment charges associated with our portfolio of short-term investments, and although we believe our current investment portfolio has little risk of material impairment, we cannot predict future market conditions or market liquidity, or credit availability, and can provide no assurance that our investment portfolio will remain materially unimpaired.
As of June 27, 2025, we did not record any impairment charges associated with our portfolio of short-term investments, and although we believe our current investment portfolio has little risk of material impairment, we cannot predict future market conditions or market liquidity, or credit availability, and can provide no assurance that our investment portfolio will remain materially unimpaired.
While we are able to assert in this Annual Report on Form 10-K that our internal control over financial reporting was effective as of June 28, 2024, we cannot predict the outcome of our testing in future periods.
While we are able to assert in this Annual Report on Form 10-K that our internal control over financial reporting was effective as of June 27, 2025, we cannot predict the outcome of our testing in future periods.
If our customers choose to manufacture products internally rather than to outsource production to us, or choose to outsource to a different third-party manufacturer, our business, financial condition and operating results could be harmed. Competitors in the market for optical manufacturing services include Benchmark Electronics, Inc., Celestica Inc., Sanmina-SCI Corporation, Jabil Circuit, Inc., and Venture Corporation Limited.
If our customers choose to manufacture products internally rather than to outsource production to us, or choose to outsource to a different third-party manufacturer, our business, financial condition and operating results could be harmed. Competitors in the market for optical manufacturing services include Benchmark Electronics, Inc., Celestica Inc., InnoLight Technology (Suzhou) Ltd., Jabil Inc., Sanmina Corporation and Venture Corporation Limited.
Consolidation in the markets we serve has resulted in a reduction in the number of potential customers for our services. For example, Lumentum Holdings Inc. completed its acquisition of NeoPhotonics Corporation in August 2022; Coherent Corp.
Consolidation in the markets we serve has resulted in a reduction in the number of potential customers for our services. For example, Nokia Corporation completed its acquisition of Infinera Corporation in February 2025; Lumentum Holdings Inc. completed its acquisition of NeoPhotonics Corporation in August 2022; Coherent Corp.
After June 2020, 50% of our income generated from products manufactured at our Pinehurst campus will be exempted from tax through June 2025. New 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.
Between June 2020 and June 2025, 50% of our income generated from products manufactured at our Pinehurst campus was exempted from tax. Preferential tax treatment is available to us for products manufactured at our Chonburi campus Building 9, where income generated will be tax exempt through 2031, capped at our actual investment amount.
Many of our existing and potential customers have substantial debt burdens, have experienced financial distress or have static or declining revenues, all of which may be exacerbated by the current global economic downturn and subsequent adverse conditions in the credit markets, as well as the impact of the U.S.-China trade dispute.
Many of our existing and potential customers have substantial debt burdens, have experienced financial distress or have static or declining revenues, all of which may be exacerbated by the current global economic downturn and subsequent adverse conditions in the credit markets, as well as the impact of changes to U.S. and international trade policies.
Our customers are located throughout the world, and our principal manufacturing facilities are located in Thailand. Revenues from the bill-to-location of customers outside of North America accounted for 63.5%, 52.0% and 50.7% of our revenues for fiscal year 2024, fiscal year 2023 and fiscal year 2022, respectively.
Our customers are located throughout the world, and our principal manufacturing facilities are located in Thailand. Revenues from the bill-to-location of customers outside of North America accounted for 56.6%, 63.5% and 52.0% of our revenues for fiscal year 2025, fiscal year 2024 and fiscal year 2023, respectively.
We expect this ban to continue to adversely affect orders from our customers for the foreseeable future. 21 Table of Contents We are subject to risks related to the ongoing U.S.-China trade dispute, including increased tariffs on materials that we use in manufacturing, which could adversely affect our business, financial condition and operating results.
We expect this ban to continue to adversely affect orders from our customers for the foreseeable future. 21 Table of Contents We are subject to risks related to changes in U.S. and international trade policies, including new or increased tariffs on materials that we use in manufacturing, which could adversely affect our business, financial condition and operating results.
For example, in the three months ended December 30, 2022, we experienced a $3.9 million foreign exchange loss, which negatively affected our net income per share for the same period by $0.11. Our customer contracts generally require that our customers pay us in U.S. dollars. However, the majority of our payroll and other operating expenses are paid in Thai baht.
For example, in the three months ended September 27, 2024, we experienced a $7.1 million foreign exchange loss, which negatively affected our net income per share for the same period by $0.19. Our customer contracts generally require that our customers pay us in U.S. dollars. However, the majority of our payroll and other operating expenses are paid in Thai baht.
From time to time, we engage in discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. As of June 28, 2024, our U.S. federal and state tax returns remain open to examination for the tax years 2019 through 2022.
From time to time, we engage in discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. As of June 27, 2025, our U.S. federal and state tax returns remain open to examination for the tax years 2020 through 2023.
During fiscal years 2024 and 2023, we had two and four customers, respectively, that each contributed 10% or more of our revenues. Such customers together accounted for 48.5% and 55.9% of our revenues during the respective periods.
During fiscal years 2025 and 2024, we had two customers that each contributed 10% or more of our revenues. Such customers together accounted for 45.8% and 48.5% of our revenues during the respective periods.
GBP are convertible in connection with trade and service-related foreign exchange transactions and foreign debt service. As of June 28, 2024, the U.S. 20 Table of Contents dollar had depreciated approximately 2.9% against the GBP since June 24, 2022. Any appreciation in the value of the RMB and GBP against the U.S. dollar could negatively impact our operating results.
GBP are convertible in connection with trade and service-related foreign exchange transactions and foreign debt service. As of June 27, 2025, the U.S. 20 Table of Contents dollar had depreciated approximately 8.1% against the GBP since June 30, 2023. Any appreciation in the value of the RMB and GBP against the U.S. dollar could negatively impact our operating results.
We hold the following additional certifications: ANSI ESD S20.20 for facilities and manufacturing process control, in compliance with ESD standard; TAPA and C-TPAT for Logistic Security Management System; and CSR-DIW for Corporate Social Responsibility in Thailand.
We hold the following additional certifications: ANSI ESD S20.20 for facilities and manufacturing process control; TAPA and CTPAT for logistics security and management; and CSR-DIW for corporate social responsibility in Thailand.
As of June 28, 2024, the U.S. dollar had appreciated approximately 3.7% against the Thai baht since June 24, 2022. While we attempt to hedge against certain exchange rate risks, we typically enter into hedging contracts with maturities of up to 12 months, leaving us exposed to longer term changes in exchange rates.
As of June 27, 2025, the U.S. dollar had depreciated approximately 8.5% against the Thai baht since June 30, 2023. While we attempt to hedge against certain exchange rate risks, we typically enter into hedging contracts with maturities of up to 12 months, leaving us exposed to longer term changes in exchange rates.
We expect to continue to invest in our manufacturing operations in the People's Republic of China ("PRC"), which will continue to expose us to risks inherent in doing business in the PRC, any of which risks could harm our business, financial condition and operating results.
We expect to continue to invest in our manufacturing operations in the PRC, which will continue to expose us to risks inherent in doing business in the PRC, any of which risks could harm our business, financial condition and operating results. We anticipate that we will continue to invest in our customized optics manufacturing facilities located in Fuzhou, the PRC.
Revenues from optical communications products represented 79.4% and 75.9% of our revenues for fiscal year 2024 and fiscal year 2023, respectively.
Revenues from optical communications products represented 76.6% and 79.4% of our revenues for fiscal year 2025 and fiscal year 2024, respectively.
This restriction may limit our ability to invest the earnings of our PRC subsidiary. As of June 28, 2024, the U.S. dollar had appreciated approximately 8.9% against the RMB since June 24, 2022. There remains significant international pressure on the PRC government to adopt a substantially more liberalized currency policy.
This restriction may limit our ability to invest the earnings of our PRC subsidiary. As of June 27, 2025, the U.S. dollar had depreciated approximately 1.3% against the RMB since June 30, 2023. There remains significant international pressure on the PRC government to adopt a substantially more liberalized currency policy.
If customers choose to delay, defer or reduce transactions with us or do business with our competitors instead of us because of any such issues, then our business, financial condition and operating results would be adversely affected.
If customers choose to delay, defer or reduce transactions with us or do business with our competitors instead of us because of any such issues, then our business, financial condition and operating results would be adversely affected. In addition, our share price could experience periods of increased volatility as a result of shareholder activism.
If we are unable to assert in any future reporting periods that our internal control over financial reporting is effective (or if our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal controls), we could lose investor confidence in the accuracy and completeness of our financial reports, which would have an adverse effect on our share price. 26 Table of Contents Given the nature and complexity of our business and the fact that some members of our management team are located in Thailand while others are located in the U.S., control deficiencies may periodically occur.
If we are unable to assert in any future reporting periods that our internal control over financial reporting is effective (or if our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal controls), we could lose investor confidence in the accuracy and completeness of our financial reports, which would have an adverse effect on our share price.
Political unrest and demonstrations, as well as changes in the political, social, business or economic conditions in Thailand, could harm our business, financial condition and operating results. The majority of our assets and manufacturing operations are located in Thailand. Therefore, political, social, business and economic conditions in Thailand have a significant effect on our business.
The majority of our assets and manufacturing operations are located in Thailand. Therefore, political, social, business and economic conditions in Thailand have a significant effect on our business. Any changes to tax regimes, laws, exchange controls or political action in Thailand may harm our business, financial condition and operating results.
Estimates, judgments and assumptions are inherently subject to change in the future, and any such changes could result in corresponding changes to the amounts of assets, liabilities, revenues, expenses and income. Any such changes could have a material adverse effect on our business, financial condition and operating results.
Estimates, judgments and assumptions are inherently subject to change in the future, and any such changes could result in corresponding changes to the amounts of assets, liabilities, revenues, expenses and income.
Further, consolidation in the optics industry could lead to larger and more geographically diverse competitors. New and increased competition could result in price reductions for our services, reduced gross profit margins or loss of market share.
These competitors may also compete with us by making more attractive offers to our existing and potential employees, suppliers, and strategic partners. Further, consolidation in the optics industry could lead to larger and more geographically diverse competitors. New and increased competition could result in price reductions for our services, reduced gross profit margins or loss of market share.
Our customized optics and glass operations face competition from companies such as Fujian Castech Crystals, Inc., Photop Technologies, Inc., and Research Electro-Optic, Inc. Other existing contract manufacturing companies, original design manufacturers or outsourced semiconductor assembly and test companies could also enter our target markets. In addition, we may face new competitors as we attempt to penetrate new markets.
Our customized optics and glass operations face competition from companies such as CASTECH, Inc., Excelitas Technologies Corp. and Photop Technologies, Inc. (a subsidiary of Coherent Corp.). Other existing contract manufacturing companies, original design manufacturers or outsourced semiconductor assembly and test companies could also enter our target markets.
In addition, these laws and regulations are relatively new, and published cases are limited in volume and non-binding. Therefore, the interpretation and enforcement of these laws and regulations involve significant uncertainties. Laws may be changed with little or no prior notice, for political or other reasons. These uncertainties could limit the legal protections available to foreign investors.
Therefore, the interpretation and enforcement of these laws and regulations involve significant uncertainties. Laws may be changed with little or no prior notice, for political or other reasons. These uncertainties could limit the legal protections available to foreign investors. Furthermore, any litigation in the PRC may be protracted and result in substantial costs and diversion of resources and management’s attention.
In addition, our share price could experience periods of increased volatility as a result of shareholder activism. 28 Table of Contents Certain provisions in our constitutional documents may discourage our acquisition by a third party, which could limit our shareholders' opportunity to sell shares at a premium.
Certain provisions in our constitutional documents may discourage our acquisition by a third party, which could limit our shareholders' opportunity to sell shares at a premium.
The PRC has made significant progress in the promulgation of laws and regulations pertaining to economic matters such as corporate organization and governance, foreign investment, commerce, taxation and trade. However, the promulgation of new laws, changes in existing laws and abrogation of local regulations by national laws may have a negative impact on our business and prospects.
The PRC has made significant progress in the promulgation of laws and regulations pertaining to economic matters such as corporate organization and governance, foreign investment, commerce, taxation and trade.
In addition, if we were found to be in violation of these laws, we could be subject to governmental fines, liability to our customers and damage to our reputation, which would also have a material adverse effect on our business, financial condition and operating results. 27 Table of Contents Risks Related to Ownership of Our Ordinary Shares Our share price may be volatile due to fluctuations in our operating results and other factors, including the activities and operating results of our customers or competitors, any of which could cause our share price to decline.
In addition, if we were found to be in violation of these laws, we could be subject to governmental fines, liability to our customers and damage to our reputation, which would also have a material adverse effect on our business, financial condition and operating results.
Furthermore, any litigation in the PRC may be protracted and result in substantial costs and diversion of resources and management’s attention. 22 Table of Contents Natural disasters, epidemics, acts of terrorism and political and economic developments could harm our business, financial condition and operating results. Natural disasters could severely disrupt our manufacturing operations and increase our supply chain costs.
Natural disasters, epidemics, acts of terrorism and political and economic developments could harm our business, financial condition and operating results. Natural disasters could severely disrupt our manufacturing operations and increase our supply chain costs.
Intellectual Property and Cybersecurity Risks Our business and operations would be adversely impacted in the event of a failure of our information technology infrastructure and/or cyber security attacks. 24 Table of Contents We rely upon the capacity, availability and security of our information technology hardware and software infrastructure.
Any such changes could have a material adverse effect on our business, financial condition and operating results. 24 Table of Contents Intellectual Property and Cybersecurity Risks Our business and operations would be adversely impacted in the event of a failure of our information technology infrastructure and/or cyber security attacks.
In particular, the political and economic climate in the PRC (both at national and regional levels) is fluid and unpredictable. A large part of the PRC’s economy is still being operated under varying degrees of control by the PRC government.
A large part of the PRC’s economy is still being operated under varying degrees of control by the PRC government.
If our suppliers experience financial difficulty, we could have trouble sourcing materials necessary to fulfill production requirements and meet scheduled shipments.
If our customers experience financial difficulty, we could have difficulty recovering amounts owed to us from these customers, or demand for our services from these customers could decline. If our suppliers experience financial difficulty, 17 Table of Contents we could have trouble sourcing materials necessary to fulfill production requirements and meet scheduled shipments.
We anticipate that we will continue to invest in our customized optics manufacturing facilities located in Fuzhou, the PRC. Because these operations are located in the PRC, they are subject to greater political, legal and economic risks than the geographies in which the facilities of many of our competitors and customers are located.
Because these operations are located in the PRC, they are subject to greater political, legal and economic risks than the geographies in which the facilities of many of our competitors and customers are located. In particular, the political and economic climate in the PRC (both at national and regional levels) is fluid and unpredictable.
We have incurred and will continue to incur significant increased costs as a result of operating as a public company, and our management will be required to continue to devote substantial time to various compliance initiatives.
In future years, the Pillar Two framework for the global minimum tax may increase the level of income tax in both Thailand and other foreign jurisdictions where we operate or have a presence. 26 Table of Contents We have incurred and will continue to incur significant increased costs as a result of operating as a public company, and our management will be required to continue to devote substantial time to various compliance initiatives.
In addition, tax returns that remain open to examination in Thailand, the PRC, the U.K. and Israel range from the tax years 2017 through 2023. The results of audits and examinations of previously filed tax returns and continuing assessments of our tax exposures may have an adverse effect on our provision for income taxes and tax liability.
The results of audits and examinations of previously filed tax returns and continuing assessments of our tax exposures may have an adverse effect on our provision for income taxes and tax liability. During fiscal year 2025, our U.S. federal tax returns were under examination by the U.S. Internal Revenue Service (“IRS”) for fiscal years 2022 and 2023.
In recent years, political unrest in the country has sparked political demonstrations and, in some instances, violence.
Thailand has a history of political unrest that includes the involvement of the military as an active participant in the ruling government. In recent years, political unrest in the country has sparked political demonstrations and, in some instances, violence.
Many of our customers and potential competitors have longer operating histories, greater name recognition, larger customer bases and significantly greater resources than we have. These advantages may allow them to devote greater resources than we can to the development and promotion of service offerings that are similar or superior to our service offerings.
In addition, we may face new competitors as we attempt to penetrate new markets. Many of our customers and potential competitors have longer operating histories, greater name recognition, larger customer bases and significantly greater resources than we have.
In addition, the failures of Silicon Valley Bank and Signature Bank in March 2023 created significant market disruption and uncertainty within the U.S. banking sector, in particular with respect to regional banks. During challenging economic times, our customers may face difficulties in gaining timely access to sufficient credit, which could impact their ability to make timely payments to us.
During challenging economic times, our customers may face difficulties in gaining timely access to sufficient credit, which could impact their ability to make timely payments to us. As a result, we devote significant resources to monitor receivables and inventory balances with certain of our customers.
Removed
As a result, we devote significant resources to monitor receivables and inventory balances with certain of our customers. If our 17 Table of Contents customers experience financial difficulty, we could have difficulty recovering amounts owed to us from these customers, or demand for our services from these customers could decline.
Added
In April 2025, the U.S. imposed global trade tariffs on a wide range of products and goods. Our business may be adversely affected by evolving global trade policies, including tariffs and other trade restrictions. We are subject to risks associated with changes in international trade policies, regulations, and relationships.
Removed
In August 2019, the U.S. imposed tariffs on a wide range of products and goods manufactured in the PRC that are directly or indirectly imported into the U.S.
Added
In recent years, multiple countries, including the United States, the PRC, and members of the European Union, among others have enacted tariffs, export controls, quotas, and other forms of trade restrictions on a variety of goods and services. These measures have led to increased costs, supply chain disruptions, and reduced demand across several industries.
Removed
Although the U.S. announced on January 15, 2020 the reduction of certain tariffs on Chinese imported goods and delayed the implementation of certain other related tariffs, we have no assurance that the U.S. will not continue to increase or impose tariffs on imports from the PRC or alter trade agreements and terms between the PRC and the U.S., which may include limiting trade with the PRC.
Added
Although certain tariffs have been reduced or delayed, the potential for future escalation or the imposition of new trade restrictions remains. Ongoing or future trade disputes may impact the availability and cost of materials used in our manufacturing processes.
Removed
Trade restrictions, including tariffs, quotas, embargoes, safeguards and customs restrictions, could increase the cost of materials we use to manufacture certain products, which could result in lower margins. The tariffs could also result in disruptions to our supply chain, as suppliers struggle to fill orders from companies trying to purchase goods in bulk ahead of announced tariffs taking effect.
Added
In some cases, suppliers may struggle to meet increased demand resulting from accelerated purchasing ahead of anticipated policy changes, further exacerbating supply chain instability. Additionally, retaliatory actions or changes in trade policies by foreign governments may reduce the demand for our customers’ products in impacted regions, which could lead to reduced orders and revenue for us.
Removed
The adoption of trade tariffs both globally and between the U.S. and the PRC specifically could also cause a decrease in the sales of our customers’ products to end-users located in the PRC, which could directly impact our revenues in the form of reduced orders.
Added
If we are unable to mitigate the effects of increased costs or pass them on to our customers, our gross margins, financial condition, and results of operations could be materially and adversely affected.
Removed
If existing tariffs are raised further, or if new tariffs are imposed on additional categories of components used in our manufacturing activities, and if we are unable to pass on the costs of such tariffs to our customers, our operating results would be harmed.
Added
We cannot predict the outcome of current or future trade negotiations, the timing of any policy changes, or the impact such changes may have on our industry, supply chain, or customer base. Political unrest and demonstrations, as well as changes in the political, social, business or economic conditions in Thailand, could harm our business, financial condition and operating results.
Removed
Any changes to tax regimes, laws, exchange controls or political action in Thailand may harm our business, financial condition and operating results. Thailand has a history of political unrest that includes the involvement of the military as an active participant in the ruling government.
Added
However, the promulgation of new laws, changes in existing laws and abrogation of local regulations by national laws may have a negative impact on our 22 Table of Contents business and prospects. In addition, these laws and regulations are relatively new, and published cases are limited in volume and non-binding.
Removed
In particular, the economic disruption caused by COVID-19 has led to reduced demand in some of our customers’ optical communications product portfolios and significant volatility in global stock markets and currency exchange rates.
Added
We rely upon the capacity, availability and security of our information technology hardware and software infrastructure.
Removed
Several governments are considering tax reform proposals that, if enacted, could increase our tax expense. The Organization for Economic Co-operation and Development (OECD) announced that it has reached agreement among its member countries to implement Pillar Two rules, a global minimum tax at 15% for certain multinational enterprises.
Added
In addition, tax returns that remain open to examination in Thailand, the PRC, the U.K. and Israel range from the 25 Table of Contents tax years 2018 through 2024.
Removed
Many jurisdictions have enacted tax laws that will take effect in 2024 and 2025 to implement Pillar Two rules. Other countries have announced plans to adopt tax laws to implement similar legislation with varying effective dates in the future. Certain jurisdictions in which we operate have not adopted corresponding legislation to date.
Added
As a result of the examination, which was completed in the fourth quarter of fiscal year 2025, we recorded additional tax liability of $5.9 million during fiscal year 2025.
Removed
These changes could increase tax uncertainty and may adversely affect our provision for income taxes and operating results. We will continue to monitor legislative and regulatory developments to assess the impact on our business, financial condition and operating results.
Added
As part of the Organization for Economic Cooperation and Development’s (“OECD”) Inclusive Framework on Base Erosion and Profit Shifting, over 140 countries have joined a two-pillar plan to reform international taxation rules.
Added
The first pillar is focused on the allocation of taxing rights between countries for in-scope multinational enterprises that sell goods and services into countries with little or no local physical presence and is intended to apply to multinational enterprises with global revenues above €20 billion.
Added
The second pillar is focused on developing a global minimum tax rate of at least 15% applicable to in-scope multinational enterprises and is intended to apply to multinational enterprises with annual consolidated group revenue in excess of €750 million. The OECD has issued Pillar Two model rules and continues to release guidance on these rules.
Added
As of June 27, 2025, 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, and there was no material impact to our tax provision for the year ended June 27, 2025.
Added
Given the nature and complexity of our business and the fact that some members of our management team are located in Thailand while others are located in the U.S., control deficiencies may periodically occur.
Added
Risks Related to Ownership of Our Ordinary Shares Our share price may be volatile due to fluctuations in our operating results and other factors, including the activities and operating results of our customers or competitors, any of which could cause our share price to decline.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFollowing these risk assessments, we evaluate whether and how to re-design, implement, and maintain safeguards intended to address and minimize identified risks and continue monitoring and testing the effectiveness of such safeguards.
Biggest changeFollowing these risk assessments, we evaluate whether and how to re-design, implement, and maintain safeguards intended to address and minimize identified risks and continue monitoring and testing the effectiveness of such safeguards. 30 Table of Contents Our VP of Information Technology and Information Security (“VP of IT/IS”), who reports to our Chief Executive Officer, manages our cybersecurity and information security risk assessment and mitigation process.
Our VP of IT/IS is a Certified Information Security Manager (CISM) and has more than 9 years of experience implementing cybersecurity at technology companies. Our VP of IT/IS, together with our internal IT security committee, is primarily responsible for assessing and managing our material risks from cybersecurity threats.
Our VP of IT/IS is a Certified Information Security Manager (CISM) and has more than 10 years of experience implementing cybersecurity at technology companies. Our VP of IT/IS, together with our internal IT security committee, is primarily responsible for assessing and managing our material risks from cybersecurity threats.
We deploy multiple tools and processes to monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents, both internal and associated with the use of any third-party service provider. 30 Table of Contents We have not experienced a material security breach in our systems, or, to our knowledge, in our third-parties’ systems, nor incurred any significant expenses or penalties to resolve or settle any security breach in the past three years.
We have not experienced a material security breach in our systems, or, to our knowledge, in our third-parties’ systems, nor incurred any significant expenses or penalties to resolve or settle any security breach in the past three years.
Removed
Our VP of Information Technology and Information Security (“VP of IT/IS”), who reports to our Chief Executive Officer, manages our cybersecurity and information security risk assessment and mitigation process.
Added
We deploy multiple tools and processes to monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents, both internal and associated with the use of any third-party service provider.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeThe following table presents the approximate square footage of our principal facilities as of June 28, 2024: Location Owned/Leased Approximate Square Footage (Square feet) Pinehurst Campus, Bangkok, Thailand Owned 1,731,000 Hemaraj Campus, Chonburi, Thailand Owned 1,496,000 Fuzhou, Fujian, PRC Leased (1) 334,000 Santa Clara, California, United States Owned 72,000 Mountain Lakes, New Jersey, United States Leased (2) 28,000 Yokneam Illit, Israel Leased (3) 27,000 Grand Cayman, Cayman Islands Leased (4) 1,280 (1) Leased until September 30, 2026.
Biggest changeThe following table presents the approximate square footage of our principal facilities as of June 27, 2025: Location Owned/Leased Approximate Square Footage (Square feet) Pinehurst Campus, Bangkok, Thailand Owned 1,731,000 Hemaraj Campus, Chonburi, Thailand Owned 1,522,000 Fuzhou, Fujian, PRC Leased (1) 348,000 Santa Clara, California, United States Owned 72,000 Mountain Lakes, New Jersey, United States Leased (2) 28,000 Yokneam Illit, Israel Leased (3) 27,000 Grand Cayman, Cayman Islands Leased (4) 1,280 (1) Leased until September 30, 2026.
(2) Leased until June 30, 2034. (3) Leased until October 5, 2024. (4) Leased until April 14, 2027.
(2) Leased until June 30, 2034. (3) Leased until October 5, 2029. (4) Leased until April 14, 2027.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAt this time, we are not able to quantify any potential liability in connection with this litigation because the case is in its early stages. In addition, we are from time to time subject to, and are presently involved in, litigation and other legal proceedings in the ordinary course of business.
Biggest changeGiven the size of our operations, we believe that environmental matters under this threshold are not material to our business or financial condition. In addition, we are from time to time subject to, and are presently involved in, litigation and other legal proceedings in the ordinary course of business.
Added
In September 2024, the Court dismissed the lawsuit in its entirety based on jurisdictional grounds. The Plaintiffs have since appealed the Court’s ruling to the High People's Court of Fujian Province (the "Appellate Court"). In their appeal, the Plaintiffs now claim that Casix is the primary obligor to return the alleged unjust enrichment to the Plaintiffs.
Added
On November 24, 2024, the Appellate Court agreed to hear the appeal. At this time, we are not able to quantify any potential liability in connection with this litigation because of the early stage of this litigation.
Added
We are subject to a variety of international and U.S. laws and regulations relating to the use, disposal, cleanup of and human exposure to hazardous materials.
Added
Item 103 of the SEC’s Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and the proceedings involve potential monetary sanctions unless we reasonably believe the monetary sanctions, exclusive of interest and costs, will not equal or exceed a threshold which we determine is reasonably designed to result in disclosure of any such proceeding that is material to our business or financial condition.
Added
Item 103 states that the disclosure threshold is $0.3 million, or at our election, a threshold that does not exceed the lesser of $1.0 million or one percent of our consolidated current assets. As permitted by Item 103, we have elected to adopt a quantitative threshold for environmental proceedings of $1.0 million.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers The following table summarizes share repurchase activity for the three months ended June 28, 2024: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased As Part of Publicly Announced Program (1) Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (1) March 30, 2024 – April 26, 2024 16,640 $ 168.71 16,640 $ 61,253,848 April 27, 2024 – May 24, 2024 4,247 $ 174.14 4,247 $ 60,514,282 May 25, 2024 – June 28, 2024 — $ — — $ 60,514,282 Total 20,887 20,887 (1) On August 21, 2017, we announced that our board of directors had approved a share repurchase program to permit us to repurchase up to $30.0 million worth of our issued and outstanding ordinary shares in the open market in accordance with applicable rules and regulations, including pursuant to pre-set trading plans adopted in accordance with Rule 10b5-1 under the Exchange Act of 1934.
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers The following table summarizes share repurchase activity for the three months ended June 27, 2025: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased As Part of Publicly Announced Program (1) Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (1) March 29, 2025 – April 25, 2025 — $ — — $ 196,534,404 April 26, 2025 – May 23, 2025 107,945 $ 206.18 107,945 $ 174,278,649 May 24, 2025 – June 27, 2025 — $ — — $ 174,278,649 Total 107,945 107,945 (1) On August 21, 2017, we announced that our board of directors had approved a share repurchase program to permit us to repurchase up to $30.0 million worth of our issued and outstanding ordinary shares in the open market in accordance with applicable rules and regulations.
Because many of our ordinary shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders. Dividends We currently intend to retain any earnings for use in our business and do not currently intend to pay dividends on our ordinary shares.
Because most of our ordinary shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders. Dividends We currently intend to retain any earnings for use in our business and do not currently intend to pay dividends on our ordinary shares.
Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report on Form 10-K for more information regarding securities authorized for issuance. Sales of Unregistered Securities None.
Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report on Form 10-K for information regarding securities authorized for issuance under our equity compensation plans. Sales of Unregistered Securities None.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our ordinary shares are listed on the New York Stock Exchange under the symbol “FN”. Holders of Record As of August 9, 2024, there were 6 shareholders of record of our ordinary shares.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our ordinary shares are listed on the New York Stock Exchange under the symbol “FN”. Holders of Record As of August 8, 2025, there were 6 shareholders of record of our ordinary shares.
The following graph compares the cumulative total return to holders of Fabrinet’s ordinary shares with the cumulative total return of the NASDAQ Composite Index, and the NASDAQ Telecommunications Index. The graph assumes that $100 was invested in Fabrinet’s ordinary shares and in each of the indices discussed above on June 28, 2019, and that all dividends were reinvested.
The following graph compares the cumulative total return to holders of Fabrinet’s ordinary shares with the cumulative total return of the NASDAQ Composite Index, and the NASDAQ Telecommunications Index. The graph assumes that $100 was invested in Fabrinet’s ordinary shares and each index on June 26, 2020, and that all dividends were reinvested.
In February 2018, May 2019, August 2020, August 2022, and August 2023, we announced that our board of directors approved increases of $30.0 million, $50.0 million, $58.5 million, $78.7 million, and $47.6 million, respectively, to the original share repurchase authorization, bringing the aggregate authorization to $294.8 million. The repurchased shares will be held as treasury stock.
In February 2018, May 2019, August 2020, August 2022, August 2023, August 2024, and January 2025, we announced that our board of directors approved increases of $30.0 million, $50.0 million, $58.5 million, $78.7 million, $47.6 million, $139.5 million, and $100.0 million, respectively, to the original share repurchase authorization, bringing the aggregate authorization to $534.3 million.
Five-Year Performance Graph The following performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Fabrinet under the Securities Act of 1933, as amended, or the Exchange Act.
As of June 27, 2025, we had a remaining authorization to repurchase up to $174.3 million worth of our ordinary shares. 33 Table of Contents Five-Year Performance Graph The following performance graph shall not be deemed “soliciting material” or to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Fabrinet under the Securities Act of 1933, as amended, or the Exchange Act.
During the year ended June 28, 2024, 211,726 shares were repurchased under the program, at an average price per share (excluding other direct costs) of $186.49, for an aggregate purchase price of $39.5 million.
During the year ended June 27, 2025, 561,858 shares were repurchased under the program, at an average price per share (excluding other direct costs) of $223.76, for an aggregate purchase price of $125.7 million.
Our share repurchase program does not have an expiration date. During the year ended June 28, 2024, repurchases under our share repurchase program were made in accordance with Rule 10b-18, including pursuant to a pre-set trading plan adopted in accordance with Rule 10b5-1.
The repurchased shares will be held as treasury stock. Our share repurchase program does not have an expiration date. Any repurchases under our share repurchase program are made in accordance with Rule 10b-18, including pursuant to pre-set trading plans adopted in accordance with Rule 10b5-1 under the Exchange Act of 1934.
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As of June 28, 2024, we had a remaining authorization to repurchase up to $60.5 million worth of our ordinary shares. 33 Table of Contents Equity Compensation Plan Information The equity compensation plan information required by this item, which includes a summary of the number of outstanding equity awards granted to employees and directors as well as the number of securities remaining available for future issuance under our equity compensation plans as of June 28, 2024, is incorporated by reference to our Proxy Statement for our 2024 Annual Meeting of Shareholders to be filed with the SEC within 120 days after the end of our fiscal year ended June 28, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur SG&A expenses increased during fiscal year 2023, compared with fiscal year 2022, mainly due to (1) recognizing an actuarial loss on obligation of $1.1 million in fiscal year 2023, compared with recognizing an actuarial gain on obligation of $1.5 million in fiscal year 2022; (2) an increase in executive benefits of $1.0 million; (3) an increase in R&D expenses of $0.8 million; (4) an increase in legal and consulting fees of $0.6 million; and (5) an increase in insurance expenses of $0.3 million; offset by a net decrease in allowance for expected credit losses of $1.5 million.
Biggest changeOur SG&A expenses increased during fiscal year 2025, compared with fiscal year 2024, mainly due to (1) an increase in executive compensation related expenses of $3.3 million, (2) an increase in legal and consulting fees of $1.6 million, (3) an increase in R&D expenses of $1.4 million, (4) an increase in share-based compensation expenses of $1.4 million, (5) an increase in information technology related expenses of $1.3 million, mainly from network, security system and new hardware costs, (6) recognizing an actuarial loss on obligation of $0.9 million in fiscal year 2025 compared with recognizing an actuarial gain on obligation of $0.4 million in fiscal year 2024, and (7) an increase in severance expenses of $0.7 million, offset by (1) a net decrease in allowance for expected credit losses of $1.1 million, (2) a decrease in sales and marketing expenses of $0.5 million, and (3) a net realized gain from financial instruments of $0.5 million.
Thus, a full valuation allowance of $1.6 million for the deferred tax assets was set up as of the end of fiscal year 2020. A full valuation allowance of $3.8 million, $4.9 million and $2.1 million were set up for the fiscal year ended June 30, 2023, June 24, 2022 and June 25, 2021, respectively.
Thus, a full valuation allowance of $1.6 million for the deferred tax assets was set up as of the end of fiscal year 2020. A full valuation allowance of $3.8 million, $4.9 million and $2.1 million was set up for the fiscal year ended June 30, 2023, June 24, 2022 and June 25, 2021, respectively.
Our interest expense decreased by $1.4 million to $0.1 million for fiscal year 2024, compared with $1.5 million for fiscal year 2023. The decrease was primarily due to a decrease in the long-term loan balance. Foreign exchange gain (loss), net .
Our interest expense decreased by $1.4 million to $0.1 million for fiscal year 2024, compared with $1.5 million for fiscal year 2023. The decrease was primarily due to a decrease in the long-term balance. Foreign exchange gain (loss), net .
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 percentage, from individual customers representing 10% or more of our revenues is set forth in Note 21 of our audited consolidated financial statements.
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 percentage, from individual customers representing 10% or more of our revenues is set forth in Note 20 of our audited consolidated financial statements.
Our revenues increased by $237.8 million, or 9.0%, to $2,883.0 million for fiscal year 2024, compared with $2,645.2 million for fiscal year 2023. This increase was primarily due to an increase in our key customers’ demand for optical communication products.
Comparison of Fiscal Year 2024 with Fiscal Year 2023 Revenues . Our revenues increased by $237.8 million, or 9.0%, to $2,883.0 million for fiscal year 2024, compared with $2,645.2 million for fiscal year 2023. This increase was primarily due to an increase in our key customers’ demand for optical communication products.
Years Ended June 28, 2024 June 30, 2023 June 24, 2022 Revenues 100.0 % 100.0 % 100.0 % Cost of revenues (87.6) (87.3) (87.7) Gross profit 12.4 12.7 12.3 Selling, general and administrative expenses (2.8) (2.9) (3.3) Restructuring and other related costs 0.0 (0.3) 0.0 Operating income 9.6 9.5 9.0 Interest income 1.2 0.4 0.1 Interest expense 0.0 (0.1) 0.0 Foreign exchange gain (loss), net 0.0 0.0 0.1 Other income (expense), net 0.0 0.0 (0.1) Income before income taxes 10.8 9.8 9.1 Income tax expense (0.5) (0.4) (0.3) Net income 10.3 9.4 8.8 Other comprehensive income (loss), net of tax 0.2 0.2 (0.3) Net comprehensive income 10.5 % 9.6 % 8.5 % 43 Table of Contents The following table sets forth our revenues by end market and product category for the periods indicated.
Years Ended June 27, 2025 June 28, 2024 June 30, 2023 Revenues 100.0 % 100.0 % 100.0 % Cost of revenues (87.9) (87.6) (87.3) Gross profit 12.1 12.4 12.7 Selling, general and administrative expenses (2.6) (2.8) (2.9) Restructuring and other related costs (0.1) 0.0 (0.3) Operating income 9.4 9.6 9.5 Interest income 1.2 1.2 0.4 Interest expense — 0.0 (0.1) Foreign exchange gain (loss), net (0.3) 0.0 0.0 Other income (expense), net 0.0 0.0 0.0 Income before income taxes 10.3 10.8 9.8 Income tax expense (0.7) (0.5) (0.4) Net income 9.6 10.3 9.4 Other comprehensive income (loss), net of tax 0.4 0.2 0.2 Net comprehensive income 10.0 % 10.5 % 9.6 % 43 Table of Contents The following table sets forth our revenues by end market and product category for the periods indicated.
Capital investments by foreign- 39 Table of Contents 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.
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.
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.
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 39 Table of Contents documents and, in the case of capital account item transactions, obtaining approval from SAFE.
Our cost of revenues is significantly impacted by salary levels in Thailand, the PRC and the United Kingdom, the fluctuation of the Thai baht, RMB and GBP 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.
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.
Our interest income increased by $22.0 million, or 196.4% to $33.2 million, or 1.2% of revenues, for fiscal year 2024, compared with $11.2 million, or 0.4% for fiscal year 2023.
Our interest income increased by $22.0 million, or 196.4% to $33.2 million, or 1.2% for fiscal year 2024, compared with $11.2 million, or 0.4% for fiscal year 2023.
The increase was primarily due to a higher weighted average interest rate in fiscal year 2024 and a higher average cash balance and short-term investment of $722.0 million in fiscal year 2024, compared with $468.0 million in fiscal year 2023. 44 Table of Contents Interest expense .
The increase was primarily due to a higher weighted average interest rate in fiscal year 2024, and a higher average cash balance and short-term investment of $722.0 million in fiscal year 2024, compared with $468.0 million in fiscal year 2023. Interest expense .
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 revenue is recognized upon shipment.
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.
The RMB liabilities represent trade accounts payable, accrued expenses, income tax payable, accrued payroll, bonus and related expenses, and other payables. As of June 28, 2024 and June 30, 2023, we did not have any derivative contracts denominated in RMB. The GBP assets represent cash, trade accounts receivable, 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 June 27, 2025 and June 28, 2024, we did not have any derivative contracts denominated in RMB. The GBP assets represent cash, trade accounts receivable, and other current assets.
Charges included in SG&A expenses for bonus distributions to non-executive and executive employees were $6.4 million, $6.1 million and $5.0 million for fiscal years 2024, 2023 and 2022, respectively. Share-based compensation expense included in SG&A expenses was $21.2 million, $20.9 million and $22.1 million for fiscal years 2024, 2023 and 2022, respectively.
Charges included in SG&A expenses for bonus distributions to non-executive and executive employees were $6.8 million, $6.4 million and $6.1 million for fiscal years 2025, 2024 and 2023, respectively. Share-based compensation expense included in SG&A expenses was $22.5 million, $21.2 million and $20.9 million for fiscal years 2025, 2024 and 2023, respectively.
The weighted average interest rate on our cash and cash equivalents for fiscal year 2024, fiscal year 2023 and fiscal year 2022 was 4.4%, 2.4% and 0.5%, respectively. Our cash investments are made in accordance with an investment policy approved by the audit committee of our board of directors.
The weighted average interest rate on our cash and cash equivalents for fiscal year 2025, fiscal year 2024 and fiscal year 2023 was 4.2%, 4.4% and 2.4%, respectively. Our cash investments are made in accordance with an investment policy approved by the audit committee of our board of directors.
Restructuring and other related costs. We recorded a de minimis amount of restructuring costs for fiscal year 2024. We recorded restructuring and other related costs for fiscal year 2023 of $6.9 million. Operating income .
Restructuring and other related costs. We recorded a de minimis amount of restructuring costs for fiscal year 2024. We recorded restructuring and other related costs for fiscal year 2023 of $6.9 million. 45 Table of Contents Operating income .
After June 2020, 50% of our income generated from products manufactured at our Pinehurst campus will be exempted from tax through June 2025. New 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.
Between June 2020 and June 2025, 50% of our income generated from products manufactured at our Pinehurst campus was exempted from tax. Preferential tax treatment is available to us for products manufactured at our Chonburi campus Building 9, where income generated will be tax exempt through 2031, capped at our actual investment amount.
The GBP liabilities represent trade accounts payable, accrued expenses, and other payables. As of June 28, 2024 and June 30, 2023, we did not have any derivative contracts denominated in GBP.
The GBP liabilities represent trade accounts payable, accrued expenses, and other payables. As of June 27, 2025 and June 28, 2024, we did not have any derivative contracts denominated in GBP.
For fiscal years 2024 and 2023, we recorded an unrealized gain of $0.7 million and $0.4 million, respectively, related to derivatives that are not designated as hedging instruments in the consolidated statements of operations and comprehensive income.
For fiscal years 2025 and 2024, we recorded an unrealized gain of $1.9 million and $0.7 million, respectively, related to derivatives that are not designated as hedging instruments in the consolidated statements of operations and comprehensive income.
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 future revenues attributable to customers in regions outside of North America will increase compared with the portion of those revenues for fiscal year 2024; • our expectation that we will incur incremental costs of revenue as a result of our planned expansion of our business into new geographic markets; • our expectation that our fiscal year 2025 selling, general and administrative (“SG&A”) expenses will increase compared to our fiscal year 2024 SG&A expenses; • our expectation that our employee costs will increase in Thailand and the People’s Republic of China (“PRC”); • our future capital expenditures and our needs for additional financing; • the expansion of our manufacturing capacity, including into new geographies; • 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.
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 future revenues attributable to customers in regions outside of North America will increase compared with the portion of those revenues for fiscal year 2025; • 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.
In August 2023, the compensation committee awarded bonuses to our executive employees for Company achievements of performance under our fiscal year 2023 executive incentive plan. Discretionary merit-based bonus awards are also available to our non-executive employees and payable on a quarterly basis.
GAAP operating margin targets for fiscal year 2024. In August 2024, the compensation committee awarded bonuses to our executive employees for Company achievements of performance under our fiscal year 2024 executive incentive plan. Discretionary merit-based bonus awards are also available to our non-executive employees and payable on a quarterly basis.
As of June 28, 2024, there was $135.0 million of foreign currency forward contracts outstanding on the Thai baht payables. As of June 30, 2023, there was $143.0 million of foreign currency forward contracts outstanding on the Thai baht payables. The RMB assets represent cash and cash equivalents, trade accounts receivable, other receivables, and other current assets.
As of June 27, 2025, there was $165.0 million of foreign currency forward contracts outstanding on the Thai baht payables. As of June 28, 2024, there was $135.0 million of foreign currency forward contracts outstanding on the Thai baht payables. The RMB assets represent cash and cash equivalents, trade accounts receivable, other receivables, and other current assets.
During fiscal year 2024 and fiscal year 2023, a change of 10% for excess and obsolete materials, based on product demand and production requirements from our customers, would have affected our net income by approximately $0.6 million and $1.0 million, respectively.
During fiscal year 2025 and fiscal year 2024, a change of 10% for excess and obsolete materials, based on product demand and production requirements from our customers, would have affected our net income by approximately $0.6 million for both years.
The compensation committee of our board of directors approved a fiscal year 2024 executive incentive plan with quantitative objectives based solely on achieving certain revenue targets and non-U.S. GAAP operating margin targets for fiscal year 2024. Bonuses under the fiscal year 2024 executive incentive plan are payable after the end of fiscal year 2024.
GAAP operating margin targets for fiscal year 2025. Bonuses under the fiscal year 2025 executive incentive plan are payable after the end of fiscal year 2025. In fiscal year 2024, the compensation committee approved a fiscal year 2024 executive incentive plan with quantitative objectives that were based solely on achieving certain revenue targets and non-U.S.
The foreign exchange loss was mainly due to (1) unrealized foreign exchange loss from revaluation of outstanding Thai baht assets and liabilities of $3.5 million for fiscal year 2023, and (2) realized foreign exchange loss from payment/receipt of $3.1 million for fiscal year 2023, offset by (1) foreign exchange gain from subsidiaries in the PRC and the U.K., totaling $1.5 million for fiscal year 2023, (2) unrealized foreign exchange gain from mark-to-market of forward contracts of $1.2 million for fiscal year 2023, and (3) unrealized foreign exchange gain from revaluation of other currencies of $0.4 million for fiscal year 2023.
The foreign exchange loss was mainly due to (1) unrealized loss from revaluation of outstanding Thai baht assets and liabilities of $8.0 million, (2) higher unrealized loss from revaluation of currencies other than Thai baht of $1.1 million, (3) higher realized loss from payment/receipt of $1.0 million, and (4) foreign exchange loss totaling $0.8 million from our subsidiaries in the PRC and the U.K., offset by higher unrealized gain from mark-to-market of forward contracts of $1.2 million.
Liquidity and Capital Resources Cash Flows and Working Capital We primarily finance our operations through cash flow from operating activities. As of June 28, 2024 and June 30, 2023, we had cash, cash equivalents, and short-term investments of $858.6 million and $550.5 million, respectively, and no outstanding debt and outstanding debt of $12.2 million, respectively.
Liquidity and Capital Resources Cash Flows and Working Capital We primarily finance our operations through cash flow from operating activities. As of June 27, 2025 and June 28, 2024, we had cash, cash equivalents, and short-term investments of $934.2 million and $858.6 million, respectively, and no outstanding debt.
Our fiscal years 2024, 2023, and 2022 ended on June 28, 2024, June 30, 2023 and June 24, 2022, and consisted of 52 weeks, 53 weeks and 52 weeks, respectively.
Our fiscal years 2025, 2024, and 2023 ended on June 27, 2025, June 28, 2024, and June 30, 2023, and consisted of 52 weeks, 52 weeks and 53 weeks, respectively.
The following table shows our cash flows for the periods indicated: Years Ended (in thousands) June 28, 2024 June 30, 2023 June 24, 2022 Net cash provided by operating activities $ 413,146 $ 213,310 $ 124,246 Net cash used in investing activities $ (169,751) $ (98,717) $ (135,543) Net cash used in financing activities $ (64,853) $ (80,984) $ (92,934) Net increase (decrease) in cash, cash equivalents and restricted cash $ 178,542 $ 33,609 $ (104,231) Cash, cash equivalents and restricted cash, beginning of period $ 231,368 $ 198,365 $ 303,123 Cash, cash equivalents and restricted cash, end of period $ 409,973 $ 231,368 $ 198,365 Operating Activities Cash provided by operating activities is net income adjusted for certain non-cash items and changes in certain assets and liabilities.
The following table shows our cash flows for the periods indicated: Years Ended (in thousands) June 27, 2025 June 28, 2024 June 30, 2023 Net cash provided by operating activities $ 328,365 $ 413,146 $ 213,310 Net cash used in investing activities $ (286,296) $ (169,751) $ (98,717) Net cash used in financing activities $ (147,008) $ (64,853) $ (80,984) Net increase (decrease) in cash, cash equivalents and restricted cash $ (104,939) $ 178,542 $ 33,609 Cash, cash equivalents and restricted cash, beginning of period $ 409,973 $ 231,368 $ 198,365 Cash, cash equivalents and restricted cash, end of period $ 306,425 $ 409,973 $ 231,368 Operating Activities Cash provided by operating activities is net income adjusted for certain non-cash items and changes in certain assets and liabilities.
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.
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.
Charges included in cost of revenues for bonus awards to non-executive employees were $7.1 million, $6.8 million and $6.0 million for fiscal years 2024, 2023 and 2022, respectively. Share-based compensation expense included in cost of revenues was $7.2 million, $6.7 million and $6.0 million for fiscal years 2024, 2023 and 2022, respectively.
Charges included in cost of revenues for bonus awards to non-executive employees were $7.7 million, $7.1 million and $6.8 million for fiscal years 2025, 2024 and 2023, respectively.
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.
Share-based compensation expense included in cost of revenues was $10.5 million, $7.2 million and $6.7 million for fiscal years 2025, 2024 and 2023, respectively. 37 Table of Contents 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.
The percentage of our revenues generated from a bill-to location outside of North America increased from 52.0% in fiscal year 2023 to 63.5% in fiscal year 2024, primarily because of an increase in revenue from a customer in Israel and a decrease in sales to our customers in North America.
The percentage of our revenues generated from a bill-to location outside of North America decreased from 63.5% in fiscal year 2024 to 56.6% in fiscal year 2025, primarily because of an increase in revenue from sales to our customers in North America.
Moreover, our customer concentration increases the concentration of our accounts receivable and payment default by any of our key customers will negatively impact our exposure. Many of our existing and potential customers have substantial debt burdens, have experienced financial distress or have static or declining revenues, all of which may be exacerbated by the continued uncertainty in the global economies.
Moreover, our customer concentration increases the concentration of our accounts receivable and our exposure to payment default by any of our key customers. Many of our existing and potential customers have substantial debt burdens, have experienced financial distress or have static or declining revenues.
Years Ended (in thousands) June 28, 2024 June 30, 2023 June 24, 2022 Revenues $ 2,882,967 $ 2,645,237 $ 2,262,224 Cost of revenues (2,526,849) (2,308,964) (1,983,630) Gross profit 356,118 336,273 278,594 Selling, general and administrative expenses (78,481) (77,673) (73,941) Restructuring and other related costs (32) (6,896) (135) Operating income 277,605 251,704 204,518 Interest income 33,204 11,234 2,205 Interest expense (124) (1,472) (432) Foreign exchange gain (loss), net 382 (1,211) 2,302 Other income (expense), net 287 (159) (1,627) Income before income taxes 311,354 260,096 206,966 Income tax expense (15,173) (12,183) (6,586) Net income 296,181 247,913 200,380 Other comprehensive income (loss), net of tax 4,974 4,678 (6,527) Net comprehensive income $ 301,155 $ 252,591 $ 193,853 The following table sets forth a summary of our consolidated statements of operations and comprehensive income as a percentage of total revenues for the periods indicated.
Years Ended (in thousands) June 27, 2025 June 28, 2024 June 30, 2023 Revenues $ 3,419,327 $ 2,882,967 $ 2,645,237 Cost of revenues (3,005,978) (2,526,849) (2,308,964) Gross profit 413,349 356,118 336,273 Selling, general and administrative expenses (87,466) (78,481) (77,673) Restructuring and other related costs (1,436) (32) (6,896) Operating income 324,447 277,605 251,704 Interest income 40,162 33,204 11,234 Interest expense — (124) (1,472) Foreign exchange gain (loss), net (9,251) 382 (1,211) Other income (expense), net (178) 287 (159) Income before income taxes 355,180 311,354 260,096 Income tax expense (22,653) (15,173) (12,183) Net income 332,527 296,181 247,913 Other comprehensive income (loss), net of tax 13,435 4,974 4,678 Net comprehensive income $ 345,962 $ 301,155 $ 252,591 The following table sets forth a summary of our consolidated statements of operations and comprehensive income as a percentage of total revenues for the periods indicated.
The following table presents percentages of total revenues by geographic regions: Years Ended June 28, 2024 June 30, 2023 June 24, 2022 North America 36.5 % 48.0 % 49.3 % Asia-Pacific 57.1 43.2 37.0 Europe 6.4 8.8 13.7 100.0 % 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.
Based on the short- and medium-term indications and forecasts from our customers, we expect that the portion of our future revenues attributable to customers in regions outside of North America will increase as compared with the portion of revenues attributable to such customers during fiscal year 2025. 36 Table of Contents The following table presents percentages of total revenues by geographic regions: Years Ended June 27, 2025 June 28, 2024 June 30, 2023 North America 43.4 % 36.5 % 48.0 % Asia-Pacific 48.4 57.1 43.2 Europe 8.2 6.4 8.8 100.0 % 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.
We recorded other comprehensive income of $4.7 million, or 0.2% of revenues, for fiscal year 2023, compared with other comprehensive loss of $6.5 million, or 0.3% of revenues, for fiscal year 2022.
We recorded other comprehensive income of $13.4 million, or 0.4% of revenues, for fiscal year 2025, compared with other comprehensive income of $5.0 million, or 0.2% of revenues, for fiscal year 2024.
Operating Lease As of June 28, 2024, we have certain operating lease arrangements under which the lease payments are calculated using the straight-line method. Our rental expenses under these leases which will be paid within one year is $1.6 million and after one year is $4.3 million.
Material Cash Requirements for Contractual Obligations Operating Lease As of June 27, 2025, we have certain operating lease arrangements under which the lease payments are calculated using the straight-line method. Our rental expenses under these leases to be paid within one year and after one year are $2.1 million and $4.4 million, respectively.
(in thousands, except percentages) Year ended June 28, 2024 As a % of Total Revenues Year ended June 30, 2023 As a % of Total Revenues Year ended June 24, 2022 As a % of Total Revenues Optical communications Datacom $ 1,150,307 $ 520,796 $ 361,306 Telecom 1,138,708 1,487,551 1,421,493 Total revenue - Optical communications $ 2,289,015 79.4 % $ 2,008,347 75.9 % $ 1,782,799 78.8 % Non-optical communications Automotive $ 327,188 $ 368,581 $ 204,407 Industrial laser 122,722 125,415 149,357 Others 144,042 142,894 125,661 Total revenue - Non-optical communications $ 593,952 20.6 % $ 636,890 24.1 % $ 479,425 21.2 % Total revenue $ 2,882,967 100.0 % $ 2,645,237 100.0 % $ 2,262,224 100.0 % Comparison of Fiscal Year 2024 with Fiscal Year 2023 Revenues .
(in thousands, except percentages) Year ended June 27, 2025 As a % of Total Revenues Year ended June 28, 2024 As a % of Total Revenues Year ended June 30, 2023 As a % of Total Revenues Optical communications Datacom $ 1,155,944 $ 1,150,307 $ 520,796 Telecom 1,463,411 1,138,708 1,487,551 Total revenue - Optical communications $ 2,619,355 76.6 % $ 2,289,015 79.4 % $ 2,008,347 75.9 % Non-optical communications Automotive $ 464,369 $ 327,188 $ 368,581 Industrial laser 153,068 122,722 125,415 Others 182,535 144,042 142,894 Total revenue - Non-optical communications $ 799,972 23.4 % $ 593,952 20.6 % $ 636,890 24.1 % Total revenue $ 3,419,327 100.0 % $ 2,882,967 100.0 % $ 2,645,237 100.0 % Comparison of Fiscal Year 2025 with Fiscal Year 2024 Revenues .
Years Ended (in thousands) June 28, 2024 June 30, 2023 June 24, 2022 Capital expenditures $ 49,270 $ 66,712 $ 80,462 During fiscal year 2024, fiscal year 2023, and fiscal year 2022, we invested in a manufacturing building at our Chonburi campus and continued to purchase equipment to support the expansion of our manufacturing facilities in Thailand, the PRC and Israel.
Years Ended (in thousands) June 27, 2025 June 28, 2024 June 30, 2023 Capital expenditures $ 130,658 $ 49,270 $ 66,712 During fiscal year 2025, we invested in a new manufacturing building at our Chonburi campus and equipment for expansion of our manufacturing facilities in Thailand.
We determine realized gains or losses on sale of available-for-sale debt securities on a specific identification method and record such gains or losses as interest income in the consolidated statements of operations and comprehensive income. As of June 30, 2023, we had long-term borrowing under our credit facility agreement of $12.2 million.
We determine realized gains or losses on sale of available-for-sale debt securities on a specific identification method and record such gains or losses as interest income in the consolidated statements of operations and comprehensive income.
Cash used in financing activities was lower for fiscal year 2024 as compared to the fiscal year 2023 primarily due to lower volume of share repurchases and a decrease in withholding tax related to net share settlement of restricted share units, and lower repayment of long-term borrowings due to one fewer installment from one fewer week in the first quarter of fiscal year 2024 compared to fiscal year 2023.
The increase in cash used in financing activities for fiscal year 2025 as compared to the fiscal year 2024 was primarily due to an increase in share repurchases and higher withholding tax related to net share settlement of restricted share units, offset by lower repayment of long-term borrowings.
However, due to our cessation of operations in the U.K., management believed that it will not generate sufficient taxable income to utilize the remaining deferred tax assets. Thus, a full valuation allowance of $1.0 million was recorded as of June 28, 2024.
In fiscal year 2024, due to the planned closure of this entity, management believed that it would not generate sufficient taxable income to utilize the remaining deferred tax assets. Thus, a full valuation allowance of $1.0 million was recorded.
Income before income taxes . We recorded income before income taxes of $260.1 million for fiscal year 2023, compared with $207.0 million for fiscal year 2022. Income tax expense . Our provision for income tax reflects an effective tax rate of 4.7% and 3.2% for fiscal year 2023 and fiscal year 2022, respectively.
Income before income taxes . We recorded income before income taxes of $355.2 million for fiscal year 2025, compared with $311.4 million for fiscal year 2024. Income tax expense . Our provision for income tax reflects an effective tax rate of 6.4% and 4.9% for fiscal year 2025 and fiscal year 2024, respectively.
Gains or losses on our forward and put option contracts generally present gross amount in the assets, liabilities, and transactions economically hedged. 38 Table of Contents We had foreign currency denominated assets and liabilities in Thai baht, RMB and GBP as follows: As of June 28, 2024 As of June 30, 2023 (in thousands, except percentages) Foreign Currency $ % Foreign Currency $ % Assets Thai baht 1,046,000 $ 28,385 72.5 754,443 $ 21,198 60.6 RMB 42,852 6,013 15.4 66,501 9,203 26.3 GBP 3,778 4,773 12.1 3,626 4,575 13.1 Total $ 39,171 100.0 $ 34,976 100.0 Liabilities Thai baht 3,263,391 $ 88,559 87.4 2,956,730 $ 83,078 87.0 RMB 78,418 11,003 10.9 74,652 10,331 10.8 GBP 1,359 1,717 1.7 1,625 2,050 2.2 Total $ 101,279 100.0 $ 95,459 100.0 The Thai baht assets represent cash and cash equivalents, trade accounts receivable, deposits and other current assets.
Gains or losses on our forward and put option contracts generally present gross amount in the assets, liabilities, and transactions economically hedged. 38 Table of Contents We had foreign currency denominated assets and liabilities in Thai baht, RMB and GBP as follows: As of June 27, 2025 As of June 28, 2024 (in thousands, except percentages) Foreign Currency $ % Foreign Currency $ % Assets Thai baht 1,812,680 $ 55,689 86.3 1,046,000 $ 28,385 72.5 RMB 43,637 6,092 9.4 42,852 6,013 15.4 GBP 2,031 2,790 4.3 3,778 4,773 12.1 Total $ 64,571 100.0 $ 39,171 100.0 Liabilities Thai baht 4,434,661 $ 136,242 91.5 3,263,391 $ 88,559 87.4 RMB 89,583 12,507 8.4 78,418 11,003 10.9 GBP 106 146 0.1 1,359 1,717 1.7 Total $ 148,895 100.0 $ 101,279 100.0 The Thai baht assets represent cash and cash equivalents, trade accounts receivable, deposits and other current assets.
Foreign exchange gain (loss), net . We recorded foreign exchange loss, net of $1.2 million for fiscal year 2023, compared with foreign exchange gain, net of $2.3 million for fiscal year 2022.
Foreign exchange gain (loss), net . We recorded foreign exchange loss, net of $9.3 million for fiscal year 2025, compared with foreign exchange gain, net of $0.4 million for fiscal year 2024.
The increase was primarily due to sales volume and product mix. SG&A expenses . Our SG&A expenses increased by $3.8 million, or 5.1%, to $77.7 million, or 2.9% of revenues, for fiscal year 2023, compared with $73.9 million, or 3.3% of revenues, for fiscal year 2022.
Our gross profit increased by $57.2 million, or 16.1%, to $413.3 million, or 12.1% of revenues, for fiscal year 2025, compared with $356.1 million, or 12.4% of revenues, for fiscal year 2024. The increase was primarily due to sales volume and product mix. SG&A expenses .
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.
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. During fiscal years 2025, 2024 and 2023, discretionary merit-based bonus awards were made to our non-executive employees.
The increase in other comprehensive income was mainly due to (1) unrealized gain from mark-to-market of available-for-sale debt securities of $9.1 million for fiscal year 2023, and (2) unrealized gain from mark-to-market of forward contracts and interest rate swap agreement of $2.1 million for fiscal year 2023.
The increase in other comprehensive income was mainly due to (1) higher unrealized gain from mark-to-market of available-for-sale debt securities of $7.8 million, and (2) unrealized gain from foreign currency translation adjustment of $1.2 million, offset by (1) lower gain from retirement benefits plan of $0.3 million, and (2) lower unrealized gain from mark-to-market of forward contracts of $0.3 million.
During fiscal year 2024, our subsidiary in Israel generated net operating loss and management expected that such subsidiary would continue to have net operating losses in the foreseeable future; therefore, management believed it was more likely than not that all of the deferred tax assets of such subsidiary would not be utilized.
In fiscal year 2025, the remaining deferred tax assets and valuation allowance were written off after the application to dissolve the entity was filed in the U.K. During fiscal year 2024, our subsidiary in Israel generated net operating loss and management expected that such subsidiary would continue to have net operating losses in the foreseeable future.
Comparison of Fiscal Year 2023 with Fiscal Year 2022 Revenues . Our revenues increased by $383.0 million, or 16.9%, to $2,645.2 million for fiscal year 2023, compared with $2,262.2 million for fiscal year 2022. This increase was primarily due to an increase in our key customers’ demand for fiscal year 2023.
Our revenues increased by $536.3 million, or 18.6%, to $3,419.3 million for fiscal year 2025, compared with $2,883.0 million for fiscal year 2024. This increase was primarily due to an increase in our key customers’ demand for both optical communications products and non-optical communications products.
In fiscal year 2025, we expect our SG&A expenses will increase compared with our fiscal year 2024 SG&A expenses, mainly due to increase in compensation related expenses and investment in information technology hardware.
In fiscal year 2026, we expect our SG&A expenses will increase compared with our fiscal year 2025 SG&A expenses, mainly due to increased investment in information technology hardware and increased compensation-related expenses. The compensation committee of our board of directors approved a fiscal year 2025 executive incentive plan with quantitative objectives based solely on achieving certain revenue targets and non-U.S.
The increase in cost of revenues was primarily due to a proportional increase in sales volume. Gross profit . Our gross profit increased by $57.7 million, or 20.7%, to $336.3 million, or 12.7% of revenues, for fiscal year 2023, compared with $278.6 million, or 12.3% of revenues, for fiscal year 2022.
Our cost of revenues increased by $479.2 million, or 19.0%, to $3,006.0 million, or 87.9% of revenues, for fiscal year 2025, compared with $2,526.8 million, or 87.6% of revenues, for fiscal year 2024. The increase was in line with the increase in sales volume. Gross profit .
Thus, a full valuation allowance of $2.7 million for the deferred tax assets was set up as of the end of fiscal year 2024. 42 Table of Contents Results of Operations The following table sets forth a summary of our consolidated statements of operations and comprehensive income.
The full valuation allowance of $2.7 million continued to be recorded for the fiscal year ended June 27, 2025. 42 Table of Contents Results of Operations The following table sets forth a summary of our 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.
Restructuring and other related costs. We recorded restructuring and other related costs for fiscal year 2023 of $6.9 million. Operating income . Our operating income increased by $47.2 million, or 23.1%, to $251.7 million, or 9.5% of revenues, for fiscal year 2023, compared with $204.5 million, or 9.0% of revenues, for fiscal year 2022. Interest income .
Our interest income increased by $7.0 million, or 21.1% to $40.2 million, or 1.2% of revenues, for fiscal year 2025, compared with $33.2 million, or 1.2% for fiscal year 2024.
Our interest income increased by $9.0 million to $11.2 million for fiscal year 2023, compared with $2.2 million for fiscal year 2022. The increase was primarily due to a higher weighted average interest rate in fiscal year 2023 compared with fiscal year 2022. 45 Table of Contents Interest expense .
The increase was primarily due to a higher average cash balance and short-term investment of $919.0 million in fiscal year 2025, compared with $722.0 million in fiscal year 2024. 44 Table of Contents Interest expense . Our interest expense decreased for fiscal year 2025, compared with fiscal year 2024, due to full repayment of our long-term loan balance.
Revenues from optical communications products represented 75.9% of our revenues for fiscal year 2023, compared with 78.8% for fiscal year 2022. Cost of revenues. Our cost of revenues increased by $325.4 million, or 16.4%, to $2,309.0 million, or 87.3% of revenues, for fiscal year 2023, compared with $1,983.6 million, or 87.7% of revenues, for fiscal year 2022.
Our SG&A expenses increased by $9.0 million, or 11.5%, to $87.5 million, or 2.6% of revenues, for fiscal year 2025, compared with $78.5 million, or 2.8% of revenues, for fiscal year 2024.
We expect our capital expenditures for fiscal year 2025 to increase compared to fiscal year 2024 mainly due to investment in the new manufacturing building and building improvements at our Chonburi campus. 47 Table of Contents Recent Accounting Pronouncements See Note 2 of the Notes to Consolidated Financial Statements for recent accounting pronouncements that could have an effect on us.
Recent Accounting Pronouncements See Note 2 of the Notes to Consolidated Financial Statements for recent accounting pronouncements that could have an effect on us.
Our interest expense increased by $1.1 million to $1.5 million for fiscal year 2023, compared with $0.4 million for fiscal year 2022.
Our operating income increased by $46.8 million, or 16.9%, to $324.4 million, or 9.5% of revenues, for fiscal year 2025, compared with $277.6 million, or 9.6% of revenues, for fiscal year 2024. Interest income .
Cash used in investing activities was higher for fiscal year 2024 as compared to cash used in investing activities for fiscal year 2023 primarily due to an increase in investment purchases partially offset by lower capital expenditures.
The increase in cash used in investing activities for fiscal year 2025 as compared to cash used in investing activities for fiscal year 2024 was primarily due to (1) an increase related to the commencement of construction of a new manufacturing building at our Chonburi campus, (2) an increase in capital expenditures to support certain customers, and (3) a decrease in proceeds of investment.
The increase was primarily due to higher income subject to tax in fiscal year 2023, as compared to fiscal year 2022. Net income . We recorded net income of $247.9 million, or 9.4% of revenues, for fiscal year 2023, compared with net income of $200.4 million, or 8.8% of revenues, for fiscal year 2022. Other comprehensive income (loss) .
We recorded net income of $332.5 million, or 9.7% of revenues, for fiscal year 2025, compared with net income of $296.2 million, or 10.3% of revenues, for fiscal year 2024. Other comprehensive income (loss) .
The increase in cash provided by operating activities for fiscal year 2024 as compared to fiscal year 2023 was primarily driven by efficient cash-favorable working capital changes and higher net income. Investing Activities Investing cash flows consist primarily of investment purchases, sales, maturities, and disposals; and capital expenditures.
Investing Activities Investing cash flows consist primarily of investment purchases, sales, maturities, and disposals; and capital expenditures.
Removed
We expect that disruptions in our supply chain and fluctuations in the availability of parts and materials will continue to have an adverse impact on our ability to generate revenue, despite strong demand from our customers.
Added
Therefore, management believed it was more likely than not that all of the deferred tax assets of such subsidiary would not be utilized. Thus, a full valuation allowance of $2.7 million for the deferred tax assets was set up as of the end of fiscal year 2024.
Removed
Furthermore, in some cases, our efforts to identify and secure alternative supply chain sources have resulted in our customers or their end customers requiring requalification and validation of components, a process that can often be lengthy and has negatively impacted the timing of our revenue.
Added
Revenues from optical communications products, which represented $2,619.4 million, or 76.6%, of our revenues for fiscal year 2025, increased by $330.3 million, or 14.4%, compared to the prior fiscal year, mainly due to an increase in revenues from telecommunication products, as inventory absorption issues substantially subsided during fiscal year 2025.
Removed
In addition, we expect the near-term inventory correction that our optical communications customers are experiencing to persist, which will have an adverse impact on our ability to generate revenue. Revenues by Geography We generate revenues from three geographic regions: North America, Asia-Pacific and others, and Europe.
Added
Revenues from non-optical communications products, which represented $800.0 million, or 23.4%, of our revenues for fiscal year 2025, increased by $206.0 million, or 34.7%, compared to prior fiscal year, primarily due to growth in automotive revenue as short-term inventory absorption issues substantially subsided during fiscal year 2025. Cost of revenues .
Removed
Based on the short- and medium-term indications and forecasts from our 36 Table of Contents customers, we expect that the portion of our future revenues attributable to customers in regions outside of North America will increase as compared with the portion of revenues attributable to such customers during fiscal year 2024.
Added
Restructuring and other related costs. We recorded $1.4 million in restructuring costs for fiscal year 2025, due to restructuring of operations in our subsidiary in Thailand. We recorded a de minimis amount of restructuring costs for fiscal year 2024. Operating income .
Removed
We expect to incur incremental costs of revenue as a result of our planned expansion into new geographic markets, though we are not able to determine the amount of these incremental expenses. 37 Table of Contents During fiscal years 2024, 2023 and 2022, discretionary merit-based bonus awards were made to our non-executive employees.
Added
The increase was primarily due to higher income subject to tax and IRS audit assessment in fiscal year 2025, offset by a full valuation allowance for deferred tax assets set up in fiscal year 2024. Net income .
Removed
We expect to incur incremental costs of revenue as a result of our planned expansion into new geographic markets, though we are not able to determine the amount of these incremental expenses.
Added
In February 2025, we began construction of a new manufacturing facility of approximately 2.0 million square feet at our Chonburi campus. The total expected cost of the project is approximately $132.5 million (Thai baht 4.45 billion).
Removed
In fiscal year 2023, the compensation committee approved a fiscal year 2023 executive incentive plan with quantitative objectives that were based solely on achieving certain revenue targets and non-U.S. GAAP operating margin targets for fiscal year 2023.
Added
The decrease in cash provided by operating activities for fiscal year 2025 as compared to fiscal year 2024 was primarily due to (1) a change in inventories of $174.2 million due to new products and higher sales volume, and (2) an increase in trade receivables of $104.4 million, offset by (1) an increase in trade payables of $134.2 million, (2) an increase in net income of $36.3 million, (3) a change in other current and non-current assets of $13.1 million, and (4) an increase in accrued expenses of $11.6 million.
Removed
Note that period-to-period comparisons of operating results should not be relied upon as indicative of future performance.
Added
We expect our capital expenditures for fiscal year 2026 to decrease 47 Table of Contents compared to fiscal year 2025, mainly due to the new manufacturing building expenditures having been recognized while capital expenditures on equipment for expansion of our manufacturing facilities continue.
Removed
The increase was primarily due to (1) lower interest expense capitalized of $0.9 million following the completion of a new manufacturing building at our Chonburi campus in July 2022, and (2) lower amortization of the fair value of interest rate swaps of $0.3 million during fiscal year 2023; offset by lower interest expense due to a decrease in the amount of outstanding long-term loans.
Removed
As of June 28, 2024, we had no outstanding balance under our credit facility agreement (see Note 13 of the Notes to Consolidated Financial Statements for further details). To better manage our cash on hand, we held short-term investments of $448.6 million as of June 28, 2024.
Removed
Material Cash Requirements for Contractual Obligations As of June 28, 2024, we had material cash requirements of $5.9 million including scheduled payments within one year of $1.6 million and after one year of $4.3 million. These material cash requirements consisted of the following contractual and other obligations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−6 removed18 unchanged
Biggest changeIf overall interest rates had declined by 10 basis points during fiscal year 2024, fiscal year 2023 and fiscal year 2022, our interest income would have decreased by approximately $0.7 million, $0.5 million and $0.4 million, respectively, assuming consistent investment levels. We also have interest rate risk exposure in movements in interest rates associated with our interest-bearing liabilities.
Biggest changeIf overall interest rates had declined by 10 basis points during fiscal year 2025, fiscal year 2024 and fiscal year 2023, our interest income would have decreased by approximately $0.9 million, $0.7 million and $0.5 million, respectively, assuming consistent investment levels.
As a consequence, our gross profit margins, operating results, profitability and cash flows are adversely impacted when the dollar depreciates relative to the Thai baht or the RMB. We have a particularly significant currency rate exposure to changes 48 Table of Contents in the exchange rate between the Thai baht, the RMB and the U.S. dollar.
As a consequence, our gross profit margins, operating results, profitability and cash flows are adversely impacted when the dollar depreciates relative to the Thai baht or the RMB. We have a particularly significant currency rate exposure to changes in the exchange rate between the Thai baht, the RMB and the U.S. dollar.
Our short-term investments as of June 28, 2024 are held in various financial institutions with a maturity limit not to exceed three years, and all securities are rated A1, P-1, F1 or better.
Our short-term investments as of June 27, 2025 are held in various financial institutions with a maturity limit not to exceed three years, and all securities are rated A1, P-1, F1 or better.
As of June 28, 2024, our cash and cash equivalents were held in deposits and highly liquid investment products with maturities of three months or less with banks and other financial institutions having credit ratings of A minus or above.
As of June 27, 2025, our cash and cash equivalents were held in deposits and highly liquid investment products with maturities of three months or less with banks and other financial institutions having credit ratings of A minus or above.
We recorded unrealized gain of $0.7 million and $0.4 million, respectively, for the year ended June 28, 2024 and June 30, 2023, respectively, related to derivatives that are not designated as hedging instruments. As foreign currency exchange rates fluctuate relative to the U.S. dollar, we expect to incur foreign currency translation adjustments and may incur foreign currency exchange losses.
We recorded unrealized gain of $1.9 million and $0.7 million, respectively, for the year ended June 27, 2025 and June 28, 2024, respectively, related to derivatives that are not designated as hedging instruments. As foreign currency exchange rates fluctuate relative to the U.S. dollar, we expect to incur foreign currency translation adjustments and may incur foreign currency exchange losses.
From December 28, 2019, any gains or losses related to these outstanding foreign currency forward contracts will be recorded in accumulated other comprehensive income in the consolidated balance sheets, with subsequent reclassification to the same statement of operations and comprehensive income line item as the earnings effect of hedge items when settled.
Any gains or losses related to these outstanding foreign currency forward contracts will be recorded in accumulated other comprehensive income in the consolidated balance sheets, with 48 Table of Contents subsequent reclassification to the same statement of operations and comprehensive income line item as the earnings effect of hedge items when settled.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Interest Rate Risk We had cash, cash equivalents, and short-term investments totaling $858.6 million, $550.5 million and $478.2 million, as of June 28, 2024, June 30, 2023 and June 24, 2022, respectively.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Interest Rate Risk We had cash, cash equivalents, and short-term investments totaling $934.2 million, $858.6 million and $550.5 million, as of June 27, 2025, June 28, 2024 and June 30, 2023, respectively.
For example, a 10% weakening in the U.S. dollar against the Thai baht and the RMB would have resulted in a decrease in our net dollar position of approximately $7.2 million and $6.0 million as of June 28, 2024 and June 30, 2023, respectively.
For example, a 10% weakening in the U.S. dollar against the Thai baht and the RMB would have resulted in a decrease in our net dollar position of approximately $9.4 million and $7.2 million as of June 27, 2025 and June 28, 2024, respectively.
Removed
The interest-bearing liabilities are denominated in U.S. dollars. Until September 29, 2023, the interest expense was based on LIBOR, plus an additional margin, depending on the lending institution.
Removed
If the LIBOR had increased by 100 basis points during fiscal year 2024, fiscal year 2023 and fiscal year 2022, our interest expense would have increased by approximately $0.1 million, $0.2 million and $0.3 million, respectively, assuming consistent borrowing levels.
Removed
As a result of the phase-out of LIBOR, we amended the Term Loan Agreement to replace the interest rate reference from LIBOR to the SOFR effective from September 29, 2023 (see Note 13). We therefore entered into interest rate swap agreements (the “Swap Agreements”) to manage this risk and increase the profile of our debt obligation.
Removed
The terms of the Swap Agreements, one of which matured in June 2023, allow us to effectively convert the floating interest rate to a fixed interest rate. This locks the variable interest expenses associated with our floating rate borrowings and results in fixed interest expenses that are unsusceptible to market rate increases.
Removed
We designated the Swap Agreements as a cash flow hedge, and they qualify for hedge accounting because the hedges are highly effective. While we intend to continue to meet the conditions for hedge accounting, if hedges do not qualify as highly effective, the changes in the fair value of the derivatives used as hedges would be reflected in our earnings.
Removed
From September 27, 2019, any gains or losses related to these outstanding interest rate swaps will be recorded in accumulated other comprehensive income in the consolidated balance sheets, with subsequent reclassification to interest expense when settled.

Other FN 10-K year-over-year comparisons