Conferencia de resultados de Fabrinet (FN) del T4 del año fiscal 2026: los ingresos por centros de datos se disparan un 68%

Puntos clave

• Fabrinet (NYSE: FN) anunció unos ingresos en el cuarto trimestre fiscal de 2026 de 1.316 millones de dólares, un 45% interanual y por encima del rango alto de las previsiones de la directiva. El BPA diluido no GAAP alcanzó los 4,10 dólares.
• Los ingresos de todo el ejercicio fiscal 2026 aumentaron un 36% hasta los 4.600 millones de dólares, mientras que el BPA no GAAP aumentó un 39% hasta los 14,09 dólares.
• Los ingresos del segmento de centros de datos crecieron un 68% interanual y un 13% intertrimestral hasta los 669 millones de dólares, lo que representa el 51% de los ingresos totales. DCI alcanzó una tasa de ejecución de ingresos anualizada superior a los 1.000 millones de dólares.
• Para el primer trimestre fiscal de 2027, la directiva prevé unos ingresos de 1.375 millones a 1.425 millones de dólares y un BPA no GAAP de 4,10 a 4,25 dólares. El punto medio del rango de ingresos supone aproximadamente un crecimiento interanual del 43%.
• Fabrinet está ampliando su capacidad en Tailandia y Silicon Valley. La directiva señaló que sus planes actuales podrían elevar la capacidad de ingresos anuales desde una tasa de ejecución al cierre del cuarto trimestre fiscal de aproximadamente 5.300 millones de dólares hasta los 12.500 millones-14.000 millones de dólares en los próximos años.
• La directiva afirmó que la fuerte demanda abarca DCI, transceptores, computación de alto rendimiento, infraestructura de comunicaciones y el escalado de nuevos programas, mientras que las previsiones de los clientes ofrecen visibilidad sobre el ejercicio fiscal 2027 y posteriores. Estas previsiones no son pedidos firmes.

Datos financieros clave

Fabrinet excluyó dos partidas destacadas de sus ganancias no GAAP del cuarto trimestre fiscal: una ganancia no monetaria de 56,7 millones de dólares derivada de la reevaluación de una inversión y una provisión de 57,4 millones de dólares relacionada con el régimen fiscal complementario de Tailandia en el marco del impuesto mínimo global.

Rendimiento empresarial y operativo

Los centros de datos se convierten en la mayor categoría de ingresos

Fabrinet introdujo una nueva clasificación de ingresos basada en dónde se despliegan en última instancia los productos de los clientes. Las tres categorías son centros de datos; infraestructura de comunicaciones; y automoción, industrial y otros.

Los ingresos por centros de datos alcanzaron los 669 millones de dólares, lo que representa el 51% de los ingresos totales. DCI fue el mayor contribuyente al crecimiento, con una tasa de ejecución anualizada superior a 1.000 millones de dólares. La computación de alto rendimiento también registró un crecimiento secuencial a medida que continuó el escalado de los programas con un importante cliente hiperescalar.

La dirección prevé un impulso adicional de los nuevos programas de transceptores. Se esperaba que un programa directo con un cliente hiperescalar comenzara a escalar ya en el primer trimestre fiscal de 2027, seguido de un programa comercial en el trimestre de diciembre y otros a principios del año natural 2027.

La infraestructura de comunicaciones mantiene un crecimiento generalizado

Los ingresos de la infraestructura de comunicaciones fueron de 413 millones de dólares, lo que supone un aumento del 40% interanual y del 1% secuencial. El segmento representó el 31% de los ingresos totales.

El crecimiento fue generalizado en los sistemas de telecomunicaciones, las comunicaciones por satélite y los componentes de telecomunicaciones. La dirección también destacó las oportunidades en sistemas de red completos, productos satelitales de órbita terrestre baja y arquitecturas ópticas de múltiples vías.

Los ingresos de automoción, industrial y otros productos mejoran secuencialmente

Los ingresos de productos de automoción, industriales y otros fueron de 234 millones de dólares, lo que supone un aumento del 8% interanual y del 9% secuencial. La mejora obedeció principalmente a los productos de infraestructura de carga para vehículos eléctricos.

Base de clientes y concentración

Cuatro clientes representaron al menos el 10% de los ingresos del ejercicio fiscal 2026: Cisco con un 20%, NVIDIA con un 16%, Nokia con un 11% y Amazon con un 11%.

La dirección afirmó que la relación con Nokia se benefició de la continua solidez del antiguo negocio de Infinera y de las oportunidades adicionales con la empresa combinada.

Ampliación de capacidad

La finalización del Edificio 10 en el campus de Chonburi de Fabrinet sigue prevista para principios de 2027 y añadirá 2 millones de pies cuadrados. La empresa ha cualificado 250.000 pies cuadrados en la primera planta y prevé cualificar una cantidad similar en la tercera planta durante el primer trimestre fiscal de 2027.

Fabrinet también convirtió 120.000 pies cuadrados en Pinehurst en espacio de fabricación y puso en marcha una planta de 200.000 pies cuadrados en Nava Nakorn. Su campus recientemente adquirido en Santa Clara incluye aproximadamente 130.000 pies cuadrados de espacio de fabricación y más que duplicará su presencia en Silicon Valley.

La dirección estimó que el Edificio 10 podría aportar entre 3.000 y 3.500 millones de dólares en capacidad de ingresos anuales. La empresa también dispone de espacio para dos fábricas adicionales en Chonburi, cada una con una capacidad estimada de 1.800 millones-2.100 millones de dólares, sujeto a la combinación de productos.

Previsiones de la gerencia

Para el primer trimestre fiscal de 2027, Fabrinet prevé:

La dirección prevé un crecimiento en las tres categorías de información financiera. En el ámbito de los centros de datos, los factores impulsores previstos incluyen transceptores, DCI y productos de computación de alto rendimiento. Se espera que la infraestructura de comunicaciones se beneficie de la demanda en sistemas, componentes y otros programas.

La empresa advirtió que la estacionalidad habitual de los gastos del primer trimestre generaría un viento en contra temporal para el margen, aunque la dirección aún espera apalancamiento operativo a medida que aumenten los ingresos.

Fabrinet ofrece previsiones oficiales trimestre a trimestre. El CEO Seamus Grady afirmó que otro año de crecimiento acelerado “no estaba fuera del alcance de lo posible”, dada la perspectiva actual de la demanda, pero la empresa no publicó previsiones para todo el año fiscal 2027.

Riesgos y aspectos a vigilar

• La demanda de ciertos componentes supera la oferta disponible. La dirección señaló que los desajustes de oferta previstos se incorporaron en las previsiones del T1 fiscal.
• Las previsiones de los clientes se extienden hasta el año fiscal 2027 y más allá, pero no son compromisos de pedido vinculantes.
• Las reglas del impuesto complementario de Tailandia siguen en periodo de transición, por lo que el gasto fiscal futuro y los beneficios relacionados pueden variar.
• La elevada inversión en capacidad contribuyó a una salida trimestral de flujo de caja libre de 37 millones de dólares.
• Una posible restricción a los transceptores chinos podría beneficiar teóricamente a los proveedores occidentales, pero la dirección enfatizó que la propuesta no era definitiva y podría generar una interrupción más amplia del suministro si se implementa sin alternativas suficientes.

Aspectos destacados del turno de preguntas y respuestas con analistas

• Aumento de volumen en HPC: La dirección indicó que el negocio de HPC estaba evolucionando por encima de las expectativas, respaldado por plataformas de silicio de última generación y productos adicionales para un gran hyperscaler.
• Empaquetado óptico avanzado: Fabrinet está trabajando con clientes en óptica coempaquetada (CPO) y óptica de empaquetado cercano (NPO). La dirección considera que la NPO es una oportunidad a más corto plazo que la CPO y espera que su alianza con Raytec amplíe las capacidades de empaquetado en Tailandia.
• Densidad de ingresos: Un mayor nivel de ingresos por pie cuadrado refleja una combinación más rica de productos DCI compactos y complejos, así como eficiencia de fabricación y un mejor aprovechamiento del espacio.
• Conexiones cruzadas ópticas (OCS): Los ingresos por OCS siguen siendo reducidos, pero Fabrinet ya está enviando productos y prevé participar en un aumento de volumen mayor en el futuro.
• Integración de sistemas: La empresa se está expandiendo desde componentes ópticos hacia PCBAs, subsistemas y sistemas de red completos, con programas existentes en Nokia/Infinera y Cisco, y una o dos oportunidades adicionales en desarrollo.

Transcripción completa de la conferencia de resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

Operator

Good afternoon. Welcome to Fabrinet's Financial Results Conference Call for the Fourth Quarter of Fiscal Year 2026. [Operator Instructions] As a reminder, today's call is being recorded.

I would now like to turn the call over to your host, Garo Toomajanian, Vice President of Investor Relations.

Garo Toomajanian

Thank you, operator, and good afternoon, everyone. Thank you for joining us on today's conference call to discuss Fabrinet's financial and operating results for the fourth quarter of fiscal year 2026, which ended June 26, 2026. With me on the call today are Seamus Grady, Chairman and Chief Executive Officer; and Csaba Sverha, Chief Financial Officer. This call is being webcast, and a replay will be available on the Investors section of our website located at investor.fabrinet.com.

During this call, we will present both GAAP and non-GAAP financial measures. Please refer to the Investors section of our website for important information, including our earnings press release and investor presentation, which include our GAAP to non-GAAP reconciliation as well as additional details of our revenue breakdown. In addition, today's discussion will contain forward-looking statements about the future financial performance of the company. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from management's current expectations. These statements reflect our opinions only as of the date of this presentation, and we undertake no obligation to revise them in light of new information or future events, except as required by law. For a description of the risk factors that may affect our results, please refer to our recent SEC filings, in particular, the section captioned Risk Factors in our Form 10-Q filed on May 5, 2026. We will begin the call with remarks from Seamus and Csaba, followed by time for questions.

I would now like to turn the call over to Fabrinet's Chairman and CEO, Seamus Grady. Seamus?

Seamus Grady

Thank you, Garo. Good afternoon, everyone, and thank you for joining our call today. We are delighted to report an outstanding fourth quarter that ended a remarkable year of accelerating year-over-year revenue growth, and we are enthusiastic that our momentum will extend in the first quarter and through fiscal year 2027. Quarter-to-quarter revenue of $1.316 billion increased 45% year-over-year and exceeded the top end of our guidance range. This revenue upside flowed through to the bottom line, with non-GAAP EPS of $4.10, which was also above our guidance range. We were pleased to see success from multiple sustainable growth drivers simultaneously supporting our business as we closed out fiscal 2026, and we are excited to anticipate an even stronger fiscal 2027. For all of fiscal 2026, revenue was an impressive $4.6 billion increasing 36% from fiscal 2025. And with strong execution, net income grew even faster than revenue, producing non-GAAP EPS of $14.09 for the year.

What's most noticeable to us is that this performance did not come from any one product category or customer, but from increasing demand trends across numerous customers in multiple markets, particularly evident at customers addressing the data center market as well as those serving the communications infrastructure market. Demand from these markets continues to increase, which makes us optimistic about the long-term durability of these trends.

Before we get into the details of our results, I'd like to highlight a change in the way we will be reporting our revenue breakdown going forward. As complex optical and electronic products become more and more prevalent inside, across and between data centers, it is evident that hyperscalers and other data center service providers are the ultimate customers of many of the products we manufacture, including some of those that have been characterized as telecom products in the past. At the same time, communications infrastructure continues to be an important part of our business, driven by general purpose, longer rich products with broader applications that are not specific to data centers.

Therefore, in order for our revenue breakdown to better reflect the end markets we ultimately serve. Going forward, we will focus on three revenue categories. Number one, data centers; number two, communications infrastructure; and number three, automotive, industrial and other revenue. In addition to being better aligned with the markets we ultimately serve, this also simplifies our reporting. We will continue to provide color on trends within all of these categories to extend our transparent revenue reporting practices and to help investors better understand the underlying drivers of our business.

I would now like to talk about capacity. As you know, we have been rapidly increasing our manufacturing footprint in order to stay ahead of rising demand, and we are excited to report a number of milestones. At Building 10 in our Chonburi Campus, we remain on track to complete Building 10 by early 2027. And which will add a total of 2 million square feet to our footprint. We have already qualified 250,000 square feet on the first floor of this facility, and we expect a similar amount on the third floor to be qualified this quarter. At our Pinehurst Campus, we have completed the conversion of 120,000 square feet of office space into manufacturing space. We have also completed the acquisition of our new site in Nevanacorn earlier in the fourth quarter, and we are happy to report that this building has just been commissioned, adding another 200,000 square feet of space.

In addition to these capacity increases in Thailand, we have also been focused on expanding our footprint at Fabrinet West. Our Santa Clara operations are primarily focused on helping customers, many of which are in the same neighborhood, bring new products to market. Since Fabrinet West is an on-ramp to Bangkok, success here is measured by how efficiently we transfer our production of products to Thailand for higher volume, low-cost manufacturing at scale. To support increasing demand for these new product introduction and related services, we recently completed the acquisition of a campus at great America Place in Santa Clara, less than a mile away from our existing facility on Patrick Henry Drive. This campus consists of two office buildings and a large manufacturing space of approximately 130,000 square feet, that will more than double our Silicon Valley footprint and help support our long-term growth.

Looking back at fiscal 2026. It was a remarkable year with accelerating revenue growth and record profits. More importantly, we have set the stage for another incredible year in fiscal 2027 as our strategy plays out. In addition to increasing demand across our existing business, we will see our growth bolstered by recent program wins as we continue to pursue further opportunities across our key markets.

In summary, this is an incredible time at Fabrinet as we benefit from our focus on complex high-growth markets, and we are proud to be winning more than our fair share of the opportunities. With accelerating year-over-year revenue growth, we are enthusiastic about the strong demand trends we are seeing and confident in our ability to extend our strong track record into the new year.

Now I'd like to turn the call over to Csaba for more details on our fourth quarter results and our outlook for the first quarter of fiscal 2027. Csaba?

Csaba Sverha

Thank you, Seamus, and good afternoon, everyone. We delivered an excellent fourth quarter with year-over-year revenue growth accelerating to 45% and continued strong earnings growth. Revenue reached a record $1.316 billion, above the high end of our guidance range. We also continued to generate operating leverage, resulting in record non-GAAP EPS of $4.10, which also exceeded our expectations. As Seamus described, we have updated our revenue mix reporting to better reflect the end markets we serve and that our customers' products are ultimately deployed. The investor deck posted on our website provides a 12-quarter history under the new reporting structure, along with the reconciliation of our Q4 results to the prior categories. This change is purely presentational and has no impact on total revenue in any period.

Now turning to the details, beginning with data center revenue. This category includes optical and interconnect products deployed within data centers including data center networking with an expanded view of DCI, high-performance computing and other AI infrastructure applications. Data center revenue was $669 million in the fourth quarter, representing growth of 68% from a year ago and 13% from Q3. This is now our largest category, representing 51% of total revenue. DCI products were the largest contributor to data center growth in the fourth quarter with an annualized revenue run rate exceeding $1 billion. High Performance Computing, or HPC, also made a substantial contribution to data center revenue, a solid growth in the quarter. Looking ahead, we expect the momentum we saw in the fourth quarter to continue into fiscal 2027, supported further by the new transceiver wins we discussed last quarter.

Moving to communications infrastructure. This category includes optical and networking products used in telecommunications and enterprise networks, excluding products specific to data center applications. Revenue was $413 million, an increase of 40% from a year ago and 1% from Q3, representing 31% of total revenue. Growth was broad-based across customers and end markets, including telecom systems, satellite communications and telecom components. We remain optimistic about the long-term growth outlook for this market and expect continuous trend in fiscal 2027.

Turning now to automotive, industrial and other category. Revenue was $234 million, up 8% from a year ago and 9% from Q3, representing 18% of total revenue. The improving sequential growth was primarily driven by EV charging infrastructure products with a smaller contribution from growth at certain later customers. Overall, we are extremely excited about the growth trajectory and the broad-based trend in demand across the customers and end markets we serve. As I discussed the details of our P&L, all expense and profitability metrics will be presented on a non-GAAP basis unless otherwise noted.

Gross margin in the fourth quarter was 12.2%, a 10 basis point improvement from Q3 and a 30 basis point decline from a year ago. We continue to demonstrate strong operating leverage with operating expenses representing just 1.2% of revenue. This produced an operating margin of 10.9%, our highest level in three years. I'll remind you that our growth model does not require significant incremental operating expense, and we, therefore, expect continued operating leverage as revenue growth. Interest income was $7 million, and we saw a foreign exchange revaluation gain of $1 million in Q4. Income tax was $3 million in the quarter. GAAP net income was $139 million or $3.83 per diluted share. Non-GAAP net income was $149 million or $4.10 per diluted share.

In calculating our Q4 non-GAAP earnings, we excluded two items that we believe provide useful information to investors in assessing our results and comparability across periods. First, we recorded an approximately $56.7 million noncash gain from remeasuring our investment in rate. This was an accounting gain on an existing investment and did not generate cash for the business. We intend to apply the same treatment consistently to the future gains or losses from remeasurement of this investment.

Second, we recorded $57.4 million provision related to Thailand's top-up tax regime under the OSE, the Global Minimum Tax framework. The provision reflects the first year application of the new framework is based on the rules in effect at our fiscal year end. No cash was paid in fiscal 2026 in connection with this [indiscernible]. Thailand's regulatory environment for this tax remains in transition as implementing regulations guidance and related investment support measures continue to develop. As a result, future tax expense and any related benefits will vary over time, and we intend to apply a consistent approach while the transition continues.

For the full fiscal year, revenue was a record $4.6 billion, up 36% from fiscal 2025. Non-GAAP EPS was $14.09, an increase of 39% from a year ago. In 2026, we continue to diversify our customer base with four customers representing 10% or more of total revenue. These were Cisco at 20%; NVIDIA at 16% and Nokia at 11% and Amazon at 11% of total revenue.

Turning to our balance sheet. We ended the fourth quarter with cash and short-term investments of $876 million, down $70 million from the end of Q3. Operating cash flow for the quarter was $55 million. CapEx increased to $92 million with ongoing construction of Building on in Chonburi and the purchase of our new campus in Nava Nakorn for $11 million. Free cash flow was an outflow of $37 million in the quarter. For the full year, operating cash flow was $257 million, free cash flow was $4 million. This reflects our disciplined capital allocation strategy and our continued investment in capacity to support long-term growth. We believe reinvesting in the business remains one of the most attractive uses of our cash, supporting continued growth by generating strong ROIC.

In the fourth quarter, we did not repurchase a meaningful number of shares. However, our share repurchase program remains active with approximately $169 million available at the end of the quarter under our current authorization. Turning to our fiscal Q1 2027 guidance. As we look to the first quarter, we entered a new fiscal year with strong momentum across the business. In the data center market, we anticipate strong broad-based growth across transceivers, DCI and high-performance computing products. We expect growth from both established programs and new urbans, providing multiple growth engines for the company.

In communications infrastructure, we also expect healthy growth, supported by continued strong demand across a broad range of systems, components and other programs. We are also optimistic that we will see growth in automotive, industrial and other revenue. In total, we expect first quarter revenue to be between $1.375 billion and $1.425 billion, representing year-over-year growth of 43% at the mid-quarter. While our usual first quarter expense seasonality will create a temporary margin headwind, we expect to continue generating operating leverage as revenue growth. As such, we anticipate EPS to be between $4.10 and $4.25. While we only guide 1 quarter at the time, we think it's important to convey that we are more confident than ever in our longer-term outlook as customers provide us with visibility that goes into fiscal 2027 and beyond. While this longer-term customer forecasts are not order commitments, they reinforce our confidence in the durability of the very strong demand trends we are seeing.

In summary, our outstanding fourth quarter results kept a remarkable year for the company, with revenue increasing 36% and EPS growing 39%. We enter fiscal 2027 with strong momentum driven by growing demand across existing programs, meaningful contributions from new program ramps and additional capacity coming online to support continued growth.

Operator, we are now ready to open the call for questions.

Operator

[Operator Instructions] It comes from Christopher Rolland with Susquehanna.

Preguntas y respuestas

Unknown Analyst

This is Yasha on for Christopher Rolland. So I wanted to ask on datacom. It was down slightly sequentially in the quarter. So can you help us understand the dynamics there? How much of that was component supply versus any program transition or demand timing. And as we look into September and beyond, how should we think about the shape of datacom recovery? Do the constraints ease and any way to frame like sequential or year-over-year growth?

Csaba Sverha

This is Csaba. Let me take that question first. So we are transitioning to our new revenue categories as we mentioned in our prepared remarks. So if you were to look at or to reconcile our Q4, our datacom was somewhat flat. Obviously, this is a combination of everything that you have mentioned. When we are looking at this category in our data center business in the future quarter, we do anticipate this to be up sequentially in our Q1 guidance. So the demand environment remains pretty robust and accelerating. So we are very optimistic about this subcategory that we are now going to report inside our data center revenue category.

Unknown Analyst

And my second question is on HPC. I think previously, you had talked about a $150 million quarterly run rate for September. So is that still the expectation for the next quarter? Or maybe has the timing there kind of shifted. I think in your prepared remarks, you highlighted new transceiver wins with this customer. So any additional color there? Is this for 800 gig, 1.6T or any other color on like applications?

Seamus Grady

Yes, this is Seamus. Our HPC business continues to perform, I would say, ahead of expectations. We demonstrated good sequential growth in the quarter as a number of programs with the major hyperscaler continues to ramp. We're in the process of ramping the customer's next-generation silicon platform, and we're installing additional capacity to support both the technology transition as well as additional products and capacity that we're adding additional products that will be manufacturing. We remain on track with the customer, and we expect that business to continue to grow. You mentioned the, let's say, the transceiver business as well with that particular customer. So we're excited to be expanding our data center transceiver business with a number of new customers and programs. We expect these programs to see -- we expect these programs to start ramping as soon as this quarter with the hyperscaler direct program among the first Solange, the one you mentioned. We do expect one of the merchant programs to begin in the December quarter and the others to get off the ground in early calendar 2027. This is all pretty consistent with our prior expectations for a meaningful ramp over the course of the fiscal year, supporting our very strong growth trends.

Operator

It comes from George Notter with Wolf Research.

George Notter

I wanted to ask about some of the capacity additions in the business. obviously, we're getting ready to wrap up Building 10 in the next few months. I'm just curious on your thoughts around building an I think, Seamus, if you go back in time, I think you admitted at one point that maybe you started building 10 a little bit too late. I guess I'm just wondering how you think about the triggers now for Building 11 and then longer-term capacity additions?

Seamus Grady

No. I think we started Building 10 as it turns out at exactly the right time, either by excellent planning or good luck or combination of both. Yes, we continue to expand our capacity ahead of the demand and investing in capacity for us is a very important use of the cash. And we're really rapidly expanding our manufacturing footprint to support the strong customer growth that we're seeing and to make sure we have sufficient capacity for the new programs. Just to kind of frame it a little bit, we ended fiscal 2025. If you take Q4 revenue of $1.32 billion, look by that by 4, you get about 5.3%. So we're we're at a run rate of $5.3 billion, so a little bit ahead of what we had originally thought was the capacity. So $5.3 billion run rate as we exit Q4. And we have, if you like, land capacity and plans in place to bring that capacity up to between $12.5 billion and $14 billion over the coming years. And let me just explain how we get from $5.3 million to potentially $14 billion. Again, we finished FY '26 at a run rate of 5.3%. With the space we converted in Pinehurst recently that would take us up to about between 5.5% and 5.8%. We converted some office space into manufacturing. So that takes up to 5.5% to 5.8%. Building 10 will add $3 billion to $3.5 billion of capacity. So that would take us to between 8.5% and 9.3%. I know that's a pretty broad range, but it really does depend on the mix and the products that we're making for our customers. So like I said, Building 10 will add about $3 billion to $3.5 billion, taking us up to between 8.5% and 9.3%. We've already started to produce in some of just started to produce in some of Building 10. But the vast bulk of that capacity had in front of us. The Nevanacorn factory that we recently purchased, that will start contributing from Q1 onwards and at full capacity. That building has capacity for about another $200 million to $250 million. Santa Clara, the new campus, again, it's very much mix dependent. But if you just take the kind of the average revenue per square foot and applied, that Santa Clara campus would add about $200 million to $250 million of additional capacity. And then we have room to build two more factories in Chonburi, each of about 1.2 million square feet with revenue capacity of about $1.8 billion to $2.1 billion. So if you add up all of that and you take the run rate exiting Q4 and then you add the low and the high of each of those additions, you get between $12.5 billion and $14 billion. And we continue to look for more land to expand. So we've been very fortunate we've been able to keep expanding ahead of the demand, and we plan to continue to do that. We're going to be expanding -- continuing to expand aggressively over the next few years.

George Notter

Got it. Super. And then I think last quarter, when you discussed this, I think you kind of circulated or centered on an $11.5 billion revenue run rate, if I have that correct, these numbers are obviously higher. Is it just -- the difference is, obviously, a piece of this, I think, is Nava, but Santa Clara would be another piece. Are there other components in this also or no?

Seamus Grady

Yes, I think it's a combination of we're adding more space, more square footage, of course, between Nava and the other capacity issues we talked on sent car, of course, but also our revenue per square foot is increasing. We are actually increasing our revenue per square foot. We're doing more with less. We find -- we seem to always find ways to make sure we never never turned away revenue. We don't disappoint the customers. So we always find ways to get the product out. So our revenue per square foot has been increasing as well as our our square footage has been increasing. So both have been increasing.

Operator

It comes from Joseph Cardoso with JPMorgan.

Joseph Cardoso

Maybe just one on the discussion in recent weeks around CTO and MTO. And maybe more specifically about the NPL opportunity it seems like it's materializing a bit sooner than what maybe the industry or at least maybe investors have been thinking about. And I'm just curious, just given the combination of the recent relationship that you have with [indiscernible], how are you thinking about Fabrinet's ability to address these type of opportunities? I mean, I guess, CPO and MTO, but I'm just curious if NPOs looking like it's something that maybe is happening earlier for you guys and maybe to a greater magnitude than what was a quarter or two ago? And then I have a quick follow-up.

Seamus Grady

Sure. Thanks, Joe. Yes. So NPL technology sits somewhere between pluggable modules and CPO. As you know, we've built tens of millions of pluggable modules over the years. So we've clearly demonstrated that expertise. We're working on CPO today with a handful of customers, and we're already building devices, albeit not yet at full scale volumes. And since NPO, as you said, NPO combines elements of both, we feel we're very well positioned to be the leader in manufacturing and packaging and new package optics devices. As NPO scales to 6.4, 12.8 terabit and beyond, the manufacturing complexity and yield becomes increasingly important, it becomes critical. And for decades, our core strength has been transforming advanced photonics components into reliable high-volume systems. So that's really what we do. That's our sweet spot. It's probably too early to talk about, let's say, revenues and margins from those opportunities and customers as they depend on program specifics. But rest assured, we are very much involved in all of the technologies you mentioned, and NPO, I think, probably represents a more near-term opportunity and CPO for what we've seen with our customers. Our partnership with Raytec we think will be very important for us and will really be instrumental in allowing us to unlock the potential of the demand we're seeing rate will be adding capacity in Thailand in our campus. So we really feel it's important for us to have all of the packaging capabilities that are required to produce these products in the future. under our roof, either in our own production lines or in partnership with Ray tech. So we're pretty excited about those opportunities, too.

Joseph Cardoso

Very interesting. And then maybe just as my follow-up. You listed Nokia as a 10% customer, which maybe for me was a bit of a surprise. I thought maybe Ciena would be on that list. But maybe just speaking to Nokia. How much of this is a function of the Infinera business that you've had as a large customer at least historical versus maybe additional business that you have subsequently won as a function of the combination of those two companies together. Just curious if you're actually seeing the business you now winning bigger or more opportunities from the combined entity or if it's not just a function of what you have done historically with Infinera and kind of a rising tide situation?

Seamus Grady

It's a little bit of both -- I mean I don't want into too much detail on any 1 specific customer, but I think I can safely say our first objective, and it's something we don't necessarily control was to make sure that we do everything possible that when Nokia acquired Infinera at the Infinera business stays robust and sometimes in these situations when the big company acquires a smaller company, there can be product rationalizations and things like that and through no fault of your own, you can end up losing business. That didn't happen in this case. The Infinera products, I think, are instrumental and seem to have very strong demand. So the Infinera business has been rising. And then, of course, the Nokia business is going very strong as well and our our relationship with Nokia is very good. We historically have done a little bit of business with Nokia, but they were not a big customer for us historically. So really that that reputation that we had and that we continue to have with the intreneura folks has really set us in good state and we feel we're well positioned and starting, as you say, to make some breakthroughs and winning business with Nokia. So we're pretty excited about that relationship. Yes, they rose to be more than a 10% customer. And we're really just -- we feel getting started with Nokia. We feel there's a huge amount of potential there to continue to grow that relationship.

Operator

Our next question comes from Tim Long with Barclays.

Timothy Long

Yes, two, if I could, going to hit some of this again. Seamus, I know you don't want to talk too much about customers, but obviously NVIDIA's a reported one with 10% and a pretty good decline in the year. Understanding there was a lot of component issues that have plagued that business. Just curious of kind of current update on competitive landscape there particularly as the newer programs that you guys tend to lead are a little bit more mature now. So just curious how -- appreciate it's going to -- that business should overall go up a little up next quarter, but curious about the -- how you view the competitive landscape, particularly as some of the nodes have matured. And then I have a follow-up after that.

Seamus Grady

Yes. I mean, we're obviously not going to get into too much specifics on any one customer, but I will say that we're very pleased with our data center performance in Q4. And we're optimistic that we'll see sequential growth in the first quarter, both with long-standing customers, like the 1 you mentioned, and newer customers contributing to that growth. With respect to any specific parts or components don't want to speak on behalf of our customers, our suppliers in these kind of three-way relationships, especially for some of these high-profile components. But our supply chain team has been doing an excellent job managing these relationships, and we have continued to get our share of the components we need. Demand yes, demand for certain components is higher than the available supply, and we're working very hard to mitigate that to make sure we get what we need. And as always, we have taken any potential gaps in supply into account in our guidance. and expectations for growth in all three major revenue categories, including the data center business.

Timothy Long

Okay. Great. And then maybe back to the HPC, you mentioned some kind of newer opportunities there as well. I was wondering if you could just give us a little bit more color on types of products or any color you can give us or scale of what that could do to the business? It seems like it got off to a pretty good start and the ramp has been pretty good through four quarters. Just curious what other programs could be added to that to keep that business growing?

Seamus Grady

Yes. I mean the products we're talking about are really follow-on products from previous generation products. And we've also won some additional products. That relationship is going very well. It's well ahead of our expectations and on track to continue to grow for some time to come. That's -- HPC is now included in our data center category. We won't be breaking out HPC as a separate category in the future, but it is part of our data center category, along with the datacom products and also DCI and HPC because those products are really what drives the data center revenue for us. But back to your question on HPC with AWS, the business is going very well. We're very happy with the relationship. We believe the customer are too, which we just continue to focus on doing a great job for them. And that's the best way for us to win new business is to do an excellent job with the business that we have. So that's our focus.

Operator

Our next question is from Steven Fox with Fox Advisors.

Steven Fox

Seamus, I was wondering if you could talk a little bit about the system integration business doing full system with some of the telecom networking OEMs and how that's going? I believe you talked about one major program and maybe there were others in the works. But any update there would be appreciated. And then I have a follow-up.

Seamus Grady

Yes. I mean we have a number of products that we make for our customers where we do the complete network system. The sweet spot for us, Stephen, is where we do a lot of the component content maybe first and then work our way up through -- start off with components, then do the, let's say, PCBAs and then subsystems and subassemblies all the way up to complete network systems. So it's for us and for our customers, it's very important that we have sufficient component content that we're making in order for it to be attractive for the customer and also sticky from our point of view that we're doing a lot for the customer more than just assembling systems. So that's really been our focus. That's how we've had some success with that with a number of our customers. Probably the first foray into that business for us was with the the Infinera now Nokia business when Infinera acquired Corium several years ago. We've also brought on significant Cisco complete network systems business, and we're working on 1 or 2 others. They take time. They take a long time to come to fruition, and we usually start with the components and work our way up from there. So we're working very diligently on that, and we hope to have 1 or 2 to add in the coming quarters.

Steven Fox

That's helpful. And then just on your comments about being able to improve revenue per square foot. It sounds like there's some interesting details, but I don't know maybe you want to share or don't. But beyond mix, like can you give us an idea of how you're sort of getting more out the door than maybe we would have expected 90 days ago?

Seamus Grady

Well, I mean, if you look at the nature of the products and the business that's growing for us. DCI, of course, has been really good for us. And DCI products are generally physically small in form factor and revenue dense. So as we've shipped more -- as we've been shipping more complex products to our customers, that revenue per square foot metric. And that's not to be on an end all. It's a function of better mix but also improved efficiencies and better utilization of space. So there's a number of factors that go into it. It's not only one factor, but in a broad sense, it's a combination of more complex products and therefore, more revenue dense products and also a better space utilization and efficiency improvements. We're pretty relentless about finding savings and finding better ways to utilize space and save on space because space is at a premium. So it's a combination of both, Steven.

Operator

Our next question comes from the line of Ryan Koontz with Needham & Company.

Ryan Koontz

I want to ask about the telecom and DCI business, which continues to repair really, really strong numbers. Do you think you're seeing yet impact from scale up across projects, number one. And number two, when do you think that you'll see some impact from the new multi-rail amplified densification? Is that a new market opportunity for you?

Seamus Grady

Thanks, Ryan. Yes, we believe we are seeing both a scale out and scale across in our business. Again, bear in mind our customers don't necessarily share with us their plans for where all of the products we make for them are going to end up. But we believe, yes, we are participating in both scale up, scale out and scale across but specific to DCI scale out and scale across. For the -- you asked about the multi-rail product. Multi-rail architectures, they package and manage fiber pairs as a highly integrated optical system, creating really more photonics integration and manufacturing complexity per deployment. So they're quite complex and difficult. These platforms they're highly manufacturing intensive. There's a lot of value add and complexity that goes into producing these products. You have dense fiber routing and management high-volume fusion splicing and connectorization and a whole array of precision optical manufacturing technologies and assembly processes that we're really very good at we're actively engaged with customers on programs that leverage our strengths in these areas, especially in photonics integration and packaging. And we see multi-rail programs is a really good fit for us to write in our sweet spot. They're complex. They're difficult to make. They require many process steps, which are -- which these process steps are really our secret sauce, if you like. So we're heavily engaged on a number of ultra programs with our customers. Again, not really our place to announce them, but rest assured we are heavily engaged with another customers on these programs. And we're very excited about this.

Ryan Koontz

And then maybe just a question on your recasting of the segment here. when you say telecom is going to stay in communication infrastructure, that's everything that's really rack-based, should we think of it that way? So it's line systems and rec-based transponders as opposed to DCI, which I assume is all pluggable set the split that we're going to see here.

Csaba Sverha

Yes. Ryan, this is Csaba. So let me clarify what is going into the communication infrastructure. So I think the best way to think about it is where our products or our customers' products are being deployed. So that's the #1 distinction. Whatever we see a product that goes and ends up in data center or a hyperscale infrastructure. We would categorize them under data center and then the rest of the business that traditionally has been telecom -- most of them would be network systems, but also some of the longer-term long-reach products will be also falling into this category. So it's not one fits all, but the #1 tumble is that whatever the product is getting deployed if it's a data center or hyperscale that goes into data center, everything else goes into the communication infrastructure that is supporting that.

Operator

Our next question comes from Karl Ackerman with BNP Paribas.

Karl Ackerman

Seamus, on datacom, have you seen higher interest from hyperscale customers seeking to diversify away from Chinese renter suppliers? And as you address that question, do you have the laser supply commitments needed to support the upcoming transceiver ramp in the next few months. And I have a follow-up, please.

Seamus Grady

Yes. I mean the component supply, as I said in the earlier comments, it's factored into our guidance. So we're not going to go into specifics beyond that. The proposed ban and new transceivers from China, I guess, it's not yet a done deal. It remains to be seen what will happen. We don't manufacture for any Chinese providers, and we're, of course, more focused on Western providers. So in theory, that could be a positive as long as materials and components are available. It could be a positive -- should be a positive for us, but I think it's early days. Like I said, it's not a done deal. There's a lot to be unpacked before that actually comes to fruition. A lot of the transceivers that go into these data centers are coming from China. So if you just put a block on -- ban on transceivers coming from China, the whole industry guides to a halt. Besides whether it's good or bad for Fabrinet, so I think it's by no means a done deal, and we'll see what happens.

Karl Ackerman

Within comms infrastructure, how are you thinking about the opportunity to address LEO satellites today? Could you discuss your visibility there relative to your earlier view of this year?

Seamus Grady

Yes. We include that in our telecom infrastructure category. We have a number of customers we're engaged with there, primarily the two, I would say, major players in that space and there's 1 or 2 others who are looking to get into that space that we also do business with. But for us, it's a really good pace because the technology is right in our sweet spot. We have the customers today. So as that business ramps, we feel we're very well positioned to. We're making these products. We've been making them for a number of years for one customer in particular, and now a couple of other customers. So -- and they're -- again, they're right in our sweet spot. They're very straightforward, if you like, for us to make these products that really fit well with our capabilities. So we feel good about our position there. We have the two big players. And as I said, this 1 or 2 smaller ones who were we're also working with. So we think it is a lot of potential for us.

Operator

Our next question comes from the line of Mike Genovese with Rosenblatt Securities.

Unknown Analyst

[indiscernible] stepping in for Mike. I was wondering if you can touch on the progress and mainly the timing for 1.6T driving revenue from your largest datacom customer?

Seamus Grady

Yes, that's not something we're going to update the market on in this call. This is a Fabrinet call. You'll have to talk to NVIDIA about the NVIDIA product launches. So that's not something we would be disclosing to that level of detail.

Unknown Analyst

Got it. Got it. Understood. And then just a follow-up. Just with the inventory jump, I'm assuming it's relative to supply constraints in the upcoming ramp. Is there anything else there, or is it maybe regarding that?

Csaba Sverha

Well, I think the inventory jump has to do obviously with the revenue growth. So if you look at it from other perspective, we are positioning material to continue to support our customers. The material constraints are something that we have been used to in the past several years. So those would not be a meaningful increase in our inventory. So the inventory increase has to do with our growth and then the positioning for future ramps with the customers.

Operator

Our last question, it comes from the line of Tim Savageaux with Northland Capital Markets.

Timothy Savageaux

Congrats on the results. And also, congrats on growing mid-30s with NVIDIA down 20% plus for the year. I think that's the rest of the business is up nearly 60% on that basis. So that's quite impressive. Just a couple of quick questions. First, on -- as you look for Q1 2017 guidance, I imagine data center is the primary driver, but within the three drivers that you mentioned, DCI, transceivers, high-performance compute and noting that you had a really huge quarter with Cisco and DCI, and that was evident in their results. Can you kind of give us a sense of among those categories? I imagine it's transceivers that's going to drive the majority of the growth, but I'd love to get your -- any color on that.

Seamus Grady

Well, really, first of all, thanks, Tim, I think you hit the nail on the head. We finished, if you like, a 10-year spell from up to 2024, 17% compound annual growth. And then we had 19% compound annual growth in FY '25 and then 36% in FY '26 with 45% year-on-year growth in Q4. So we're pretty happy with the growth trajectory that we're on also if you look at our performance over the last while, we have 12 consecutive quarters of record revenues and 6 consecutive quarters of accelerating year-over-year growth. So it's been -- we've been on a very nice trajectory for the last while. Within the data center business, and we think it makes sense to categorize these particular products into data center because DCI, the transceivers, of course, are inside the data centers. And then high-performance compute is also essentially data center product and DCI between the data centers. The growth in all three, we think, is robust. HPC continues to grow. We won't be breaking them out individually going forward. But HPC continues to be very strong for us. We're doing very well. And we have a number of other customers that we're focused on that are not in the revenue yet, but we're working on the transceiver business, a combination of our new customer but also success we're getting with hyperscale direct and also merchant business. That is just beginning to get going as well. And we feel very good about that. And of course, DCI has been a real success story for us. I think Csaba said in his prepared remarks, our run rate on DCI is about $1 billion. Over to you, Csaba.

Csaba Sverha

Yes. So actually, our DCI business reached close to $1 billion run rate. And if you look at our Q4 numbers, our DCI business was equivalent to our historical datacom business. So that's a meaningful growth and continues to grow.

Seamus Grady

And if you look at each of those categories, I suppose, especially DCI and the transceiver, the demand is just insatiable. It's extremely robust, and we're -- the demand is coming to us and coming at us from several directions. DCI, of course, we have really all the main players the transceiver business, historically, we've had our main customer, but now we have these other growth vectors to layer on top of that, both merchant and hyperscale direct. And the high-performance computers continues to go from strength to strength. We feel very good, Tim, about our overall position in the data center business. And what's interesting is the customers are giving us visibility well out into the end of 2027 and beyond. That doesn't mean they're giving us firm orders, but they're giving you visibility and there looks to be no end in sight to the demand from the customers. We feel very good about that.

Timothy Savageaux

Well, that is a perfect segue to my next question, which is, you've mentioned accelerating growth several times, including in response to that quick question. Although I would note at the middle of the range, might break your streak, but I imagine you're not heading for the middle of the range, still in the 40s in terms of year-over-year growth. But given that lengthy list of demand drivers and the capacity additions, is it within the bounds of reasonableness to think about annual growth in fiscal '27 accelerating from what you saw in '26, especially maybe given the lack of that headwind from your largest customer?

Seamus Grady

Yes. I think that's a good point and a good question. I think, of course, the standard answer, Tim, we guide 1 quarter at a time. However, based on the picture we have right now, it is not beyond the bond's possibility. And that's not something we would ever say. I suppose we always we guide 1 quarter a time. That's -- we're going to continue to do that. But based on the demand we're seeing, certainly, the demand is there that we could see another year of accelerating growth. It's just a staggering demand picture we're seeing from our customers. And the thing that's particularly satisfying for us is the trust that the customers are placing and it's obviously the revenue is great, don't get me wrong. But it's really the trust the customers are facing is there they're trusting us with their most important products, they're leading-edge products, and we're on a ramp with several of these customers that is just amazing. So I think it's not the underground possibility, Tim, to to answer your question.

Timothy Savageaux

Great. And let me close by adding maybe one other growth driver that I don't know that's been discussed that yet, and that's optical cross-connect OCS. And we heard last week big ramp there from the industry leader, but also I think, plans to move from strictly internal to working with contract manufacturers. I wonder if you might be able to give us an update on what you think the timing might be there for you or the opportunity? And does that lie in fiscal '27 as well?

Seamus Grady

Yes. I mean OCS it remains a great opportunity for us. It's right in our wheelhouse. It's -- the manufacturing technology is very similar to products that we're already making for our customers. So we already feel like we have a bit of a head start. So no real change in our optimism on OCS to the -- there are incremental opportunities for us and that, for us, OCS is quite small today. We are shipping some product, but it's quite small. So I think the big ramp that maybe -- has been talked about, we're pretty confident we will participate in that. So we feel very good about OCS, and I think it could be a bigger, much bigger and more meaningful category for us in the future.

Csaba Sverha

The specifics of our customers ramp, we leave that to them to talk about, I think we're well positioned.

Operator

This will conclude our Q&A session for today. I will pass it back to Seamus Grady for closing.

Seamus Grady

Thank you. Thank you for joining our call today, and we delivered an outstanding performance in Q4 with continued top line acceleration that ended a tremendous year for the company. We are entering fiscal 2027 better positioned than at any other point in our history to continue delivering strong growth in response to the increased demand that we are experiencing across our business. With our deep domain expertise and increasing capacity, we expect to extend our manufacturing leadership as a trusted partner for our customers, both complex products. We look forward to sharing more excellent results with you in the future and to seeing those of you who will be attending the Rosen Black Conference tomorrow and the Wolfe Conference in September. Thanks again, and goodbye.

Operator

And thank you all for participating, and you may now disconnect.