Q1 2024 Fabrinet Earnings Call

November 6, 2023

Session and instructions on how to participate will be provided at that time.

Operator: --later we will conduct a question and answer session and instructions on how to participate will be provided at that time.

As a reminder, today's call is being recorded I would now like to turn the call over to your host Garo <unk> genius VP of Investor Relations. Please go ahead.

As a reminder, today's call is being recorded. I would now like to turn the call over to your host Garo Toomajanian, VP of Investor Relations. Please go ahead.

As a reminder, today's call is being recorded.

I would now like to turn the call over to your host Garo Toomajanian, VP of Investor Relations. Please go ahead.

Thank you operator, and good afternoon, everyone. Thank you for joining us on today's conference call to discuss <unk> financial and operating results for the first quarter of fiscal year 2024, which ended September 29 2023.

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 first quarter of fiscal year 2024, which ended September 29th, 2023.

With me on the call today are Seamus Grady, Chief Executive Officer, and <unk> Chief Financial Officer.

With me on the call today are Seamus Grady, 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.

This call is being webcast and a replay will be available on the investors section of our website located at Investor Dot Fabry net dot 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 detail of our revenue breakdown.

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 detail of our revenue breakdown.

In addition, today's discussion will contain forward looking statements about the future financial performance of the company.

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.

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-K filed on August 22 2023.

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-K filed on August 22, 2023.

We will begin the call with remarks from Seamus and traveller followed by time for questions.

We will begin the call with remarks from Seamus and Csaba followed by time for questions.

I'd now like to turn the call over to <unk> CEO Seamus Grady Seamus.

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

Thank you Jerome good afternoon, everyone and thank you for joining us on our call today we.

Seamus Grady: Thank you Gerald. Good afternoon everyone and thank you for joining us on our call today.

We set new quarterly records for revenue and EPS in our first quarter, both of which were above our guidance ranges.

Both of which were above our guidance ranges.

Free cash flow also reached a new quarterly record, we achieved triple digit year over year growth in Datacom revenue driven by next generation optical interconnect for AI applications.

Free cash flow also reached a new quarterly record. We achieved triple digit year over year growth in datacom revenue driven by next generation optical interconnect for AI applications. This datacom growth more than made up for continued but diminishing sequential declines in telecom revenue as inventory absorption runs its course.

This datacom growth more than made up for continued but diminishing sequential declines in telecom revenue has inventory absorption gondola. This course.

This datacom growth more than made up for continued but diminishing sequential declines in telecom revenue is inventory absorption runs its course.

Overall revenue was $685 $5 million, representing an increase of 5% from the fourth quarter as well as from a year ago.

Overall revenue was $685.5 million, representing an increase of 5% from the fourth quarter as well as from a year ago. Recall that the first quarter of fiscal 2023 was a 14-week quarter, adding approximately $20 million to revenue a year ago. Excluding this impact, revenue would have grown 8% year over year.

Recall that the first quarter of fiscal 2023 was a 14 week quarter, adding approximately $20 million to revenue a year ago.

Recall that the first quarter of fiscal 2023 was a 14 week quarter, having approximately $20 million to revenue a year ago.

Excluding this impact revenue would have grown 8% year over year.

Our strong revenue growth contributed to a record bottom line with non-GAAP net income of $2 per share.

Looking at the first quarter in more detail optical communications revenue increased from both a year ago and the fourth quarter.

Looking at the first quarter in more detail, optical communications revenue increased from both a year ago and the fourth quarter.

Within optical communications telecom revenue decreased sequentially by a smaller amount than anticipated.

Within optical communications, telecom revenue decreased sequentially though by a smaller amount than anticipated.

<unk> growth more than offsets the telecom decline again with sequential growth of 26% from a very strong fourth quarter.

Datacom growth more than offsets the telecom decline again with sequential growth of 26% from a very strong fourth quarter and year-over-year growth of over 160%.

And year over year growth of over 160%.

As in Q4, Datacom growth was driven primarily by AI optical interconnect.

In our non optical communications business revenue was relatively flat as anticipated.

In our non-optical communications business, revenue was relatively flat as anticipated. The small sequential decline in automotive revenue was largely offset by growth in industry lasers and other non optical communications revenue.

The small sequential decline in automotive revenue was largely offset by growth in industry lasers and other non optical communications revenue.

Looking to the second quarter, we expect the industry wide inventory adjustments and telecom to continue.

Looking to the second quarter, we expect the industry-wide inventory adjustments in telecom to continue. We believe that datacom growth, particularly in AI will more than offset these headwinds again in the second quarter.

We believe that Datacom growth, particularly NII will more than offset these headwinds again in the second quarter.

In short we are optimistic that the telecom inventory related issues are temporary.

In short, we are optimistic that the telecom inventory related issues are temporary whereas the demand strength in datacom is sustainable.

Whereas the demand strength in Datacom is sustainable.

As the demand strength in Datacom is sustainable.

In summary.

In summary, our record top and bottom line results represented a strong start to the fiscal year and we are confident that we remain well positioned to continue delivering solid results as we look ahead.

Our record top and bottom line results represented a strong start to the fiscal year.

Our record top and bottom line results represented a strong start to the fiscal year. And we are confident that we remain well positioned to continue delivering solid results as we look ahead.

And we are confident that we remain well positioned to continue delivering solid results as we look ahead.

Now I'd like to turn the call over to Chubb for additional financial details on our FERC <unk> quarter of fiscal 2024, and our guidance for the second quarter.

Now I'd like to turn the call over to Csaba for additional financial details on our first quarter of fiscal 2024 and our guidance for the second quarter. Csaba?

Sure.

Csaba Sverha: Thank you Seamus and good afternoon everyone. Revenue was above our guidance range of $685.5 million, up 5% both sequentially and from one year ago. Keep in mind that the first quarter of the prior year benefited by approximately $20 million due to an additional week.

Thank you Seamus tangled afternoon, everyone.

Thank you Seamus tangled afternoon, everyone. That revenue was above our guidance Asia, $685 $5 million up 5%, both sequentially and from one year ago.

Revenue was above our guidance Asia, $685 $5 million up 5%, both sequentially and from a year ago.

That revenue was above our guidance Asia, $685 $5 million up 5%, both sequentially and from one year ago.

Keep in mind that the first quarter of the prior year benefit debt by approximately $20 million due to an additional week.

Keep in mind that the first quarter of the prior year benefited by approximately $20 million due to an additional week.

Our strong revenue helped to produce record earnings non-GAAP net income was $2 per share, which was above our guidance range.

Our strong revenue helped to produce record earnings. Non-GAAP net income was $2 per share, which was above our guidance range. We have published additional details regarding our revenue breakdown in the investor presentation, which you can find on our website.

Have published additional details regarding our revenue breakdown in the Investor presentation, which you can find on our website.

Looking more closely at revenue I will focus my comments on the most notable changes.

So looking more closely at revenue, I will focus my comments on the most notable changes.

Optical communications revenue of $533 $3 million was a new quarterly record.

Optical communications revenue of $533.3 million was a new quarterly record. Very strong sequential Datacom growth of 26% more than made up for a smaller than anticipated decline in telecom revenue of 6%.

Very strong sequential datacom growth of 26% more than made up for a smaller than anticipated decline in telecom revenue of 6%.

Data comm growth is being driven primarily by 800 gig technology for AI applications.

Datacom growth is being driven primarily by 800 gig technology for AI applications. We believe there is still excess inventory in the supply chain and in the second quarter, we expect data for revenue to again more than offset telecom declines by a wide margin.

We believe there is still excess inventory in the supply chain and in the second quarter. We expect data core revenue again more than offset declines by a wide margin.

We believe there is still excess inventory in the supply chain and in the second quarter, we expect data for revenue to again more than offset declines by a wide margin.

Looking at optical communications revenue by beta rate growth in revenue from products right at 400 gig and foster was substantially greater than revenue declines from 100 gig programs.

Looking at optical communications revenue by beta rate, growth in revenue from products rate is 400 gig and faster was substantially greater with revenue declines from 100 gig programs.

Non optical communications revenue was call it less than the fourth quarter at $152 $2 million and represented 22% of total revenue.

Non-optical communications revenue was consistent with the fourth quarter at $152.2 million and represented 22% of total revenue.

Our automotive revenue declined 5% from the fourth quarter due to some inventory absorption. This was partially offset by a smaller sequential increase in industrial laser and other non I'll pick up communications revenue.

Automotive revenue declined 5% from the fourth quarter due to some inventory absorption. This was partially offset by a smaller sequential increase in industrial laser and other non optical communications revenue.

As I discuss the details of our P&L expense and profitability metrics on a non-GAAP basis, unless otherwise noted.

As I discuss the details of our P&L, expense and profitability metrics will be on a non-GAAP basis, unless otherwise noted.

Gross margin in the quarter was 12, 6% as anticipated gross margin declined seasonally by about 20 basis points from Q4, primarily due to annual merit increases, which take effect in the first quarter.

Gross margin in the quarter was 12.6% as anticipated gross margin declined seasonally by about 20 basis points from Q4, primarily due to annual merit increases, which take effect in the first quarter.

Operating expenses in the quarter over $14 $9 million or two 2% of revenue an improvement of 10 basis points from the fourth quarter.

Operating expenses in the quarter were $14.9 million or 2.2% of revenue, an improvement of 10 basis points from the fourth quarter. We anticipate that operating expenses will continue to decline as a percentage of revenue as our business scales.

We anticipate that operating expenses continued to decline as a percentage of revenue as our business scales.

We anticipate that operating expenses continue to decline as a percentage of revenue as our business scales.

Operating income was $71 $7 million, representing an operating margin of 10, 5% or at least under the fourth quarter.

Operating income was $71.7 million, representing an operating margin of 10.5% consistent with the fourth quarter.

Our strong balance sheet again benefit that our interest income, which was $5 $9 million in the quarter.

Our strong balance sheet again benefitted our interest income, which was $5.9 million in the quarter.

Or gain from foreign currency asset and liability revaluation at the end of the quarter, but it's relatively small at $4 million.

Our gain from foreign currency asset and liability evaluations at the end of the quarter was relatively small at $0.4 million.

The effective GAAP tax rate was seven 2% in the first quarter, which is above the mid single digit level. We continue to expect for the fiscal year as a whole.

Effective GAAP tax rate was 7.2% in the first quarter, which is above the mid single digit level we continue to expect for the fiscal year as a whole.

non-GAAP net income was a new quarterly record of $7 million to $8 million or $2 per diluted share on a GAAP basis net income was $1 78 per diluted share.

Non-GAAP net income was a new quarterly record of $72.8 million or $2 per diluted share. On a GAAP basis, net income was $1.78 per diluted share.

Turning to the balance sheet and cash flow statements at the end of the first quarter cash and short term investments were $678 million up $123 million from the end of the fourth quarter.

Turning to the balance sheet and cash flow statement, at the end of the first quarter, cash and short term investments were $670.8 million, up $120.3 million from the end of the fourth quarter. This increase was driven primarily by strong operating cash flow of $145 million.

This increase was driven primarily by through operating cash flow of $145 million.

The capex of $11 $4 million free cash flow was a quarterly record at $133 $6 billion.

With opex of $11.4 million, free cash flow was a quarterly record at $133.6 billion.

Our share repurchase program was not active in the first quarter as a result $100 million remained in our share repurchase authorization at the end of the quarter.

Our share repurchase program was not active in the first quarter. As a result, $100 million remained in our share repurchase authorization at the end of the quarter.

Now I will turn to our guidance for the second quarter.

As I mentioned, we expect inventory adjustment at our customers primarily in the telecom space to continue into the second quarter.

As I mentioned, we expect inventory adjustment at our customers primarily in the telecom space to continue into the second quarter. We expect sequential revenue growth from high data rate data from AI programs to again more than offset these telecom headwinds.

We expect sequential revenue growth from high data rate data from AI programs to again more than offset this telecom headwinds yes.

We expect sequential revenue growth from high data rate data from AI programs to again more than offset these telecom headwinds yes.

Dissipate out all of the revenue to decline sequentially and expecting nutshell laser revenue to be relatively flat.

We anticipate [inaudible] revenue to decline sequentially and expecting industrial laser revenue to be relatively flat. In total, we expect revenue to be between $680 million to $700 million.

In total we expect revenue to be between $680 million to $700 million from.

In total we expect revenue to be between $680 million to $700 million rollout.

From a profitability perspective, we anticipate non-GAAP net income to be in the range of $1 98 to two.

From a profitability perspective, we anticipate non-GAAP net income to be in the range of $1.98 to $2.05 per diluted share.

$2 <unk> per diluted share.

In summary, we are happy to have exceeded our first quarter guidance by producing record revenue net income and free cash flow, we continue to balance consistent growth with improving profitability we are.

In summary, we are happy to have exceeded our first quarter guidance by producing record revenue, net income, and free cash flow. We continue to balance consistent growth with improving profitability. We are optimistic that we can continue to execute well to deliver strong results as we look ahead.

Continue to balance consistent growth with improving profitability we.

Optimistic that we can continue to execute well to deliver strong results as we look ahead.

We are optimistic that we can continue to execute well to deliver strong results as we look ahead.

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

Thank you if you have a question at this time, please press star one on your telephone.

Operator: Thank you. If you have a question at this time, please press star one, one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one, one again. One moment while we compile our Q&A roster.

<unk> made a message of phasing here you had just raised to withdraw your question. Please press star one again, one moment, while we compile our Q&A roster.

Your question. Please press star one again, one moment, while we compile our Q&A roster.

And our first question is going to come from the line of Alex Henderson with Needham. Your line is open. Please go ahead.

Alright, Thank you very much.

Alexander B. Henderson: Great. Thank you very much. I've got a quick question for you on the news that came out of Jabil about the Jabil purchase of the Silicon photonics business over at Intel. I know Intel Silicon Photonics has been historically a customer of yours and I was wondering how you think that will impact you over time, particularly given the difficulty of moving on an existing line.

I've got a quick question for you on the news that came out of Jabil about the.

Jabil.

Jabil. Purchase of the Silicon photonics business over it. At Intel I know Intel Silicon Photonics has been. Historically, a customer of yours and I was wondering how you think that will be. <unk> do you over time, particularly given the difficulty of moving out of an existing line.

Purchase of the Silicon photonics business over it.

Purchase of the Silicon photonics business over it. At Intel I know Intel Silicon Photonics has been. Historically, a customer of yours and I was wondering how you think that will be. <unk> do you over time, particularly given the difficulty of moving out of an existing line.

At Intel I know Intel Silicon Photonics has been historically, a customer of yours and I was wondering how you think that will be an impact you over time, particularly given the difficulty of moving out of an existing line.

At Intel I know Intel Silicon Photonics has been. Historically, a customer of yours and I was wondering how you think that will be. <unk> do you over time, particularly given the difficulty of moving out of an existing line.

Historically, a customer of yours and I was wondering how you think that will be. <unk> do you over time, particularly given the difficulty of moving out of an existing line.

<unk> do you over time, particularly given the difficulty of moving out of an existing line.

Hi, Alex.

Seamus Grady: Hi, Alex. Yes, it looks like Intel wanted to exit that market for their own strategic reasons. Intel has not been a 10% customer of ours. We have been one of two sources on the programs that we're involved with. We remain focused on being a manufacturer serving several customers in the market rather than selling our own products. So for us, we understand Intel have sold the business in its entirety to Jabil, including development of new products, supply of new products et cetera, and that's just not a business that we're involved in. The immediate impact it's really too early to say. The news only become official a few days ago, so we have to sit down with our customer and walk out the transfer plans. And we're confident that in these situations, we provide a high level of service to our customers and in general we've become good at managing these type of transitions and usually find a way to come out on top.

Yes, it looks like Intel wanted to exit that market for their own strategic reasons.

Yes, it looks like Intel. Wanted to exit that market for their own strategic reasons. Intel has not been a 10% customer of ours. We have been one off one of two sources. On the program between the programs that we're involved with.

Wanted to exit that market for their own strategic reasons. Intel has not been a 10% customer of ours. We have been one off one of two sources. On the program between the programs that we're involved with.

Intel has not been a 10% customer of ours.

Intel has not been a 10% customer of ours. We have been one off one of two sources. On the program between the programs that we're involved with.

Ben one of one of two sources.

We have been one off one of two sources. On the program between the programs that we're involved with.

On the program between the programs that we're involved with.

We remain focused on being a manufacturer serving several customers in the market rather than selling our own products. So for us.

We remain focused on being a manufacturer serving several customers in the market rather than selling our own products. So for us. We understand and have sold the business in its entirety to javan, including development of new products supply of their products et cetera.

We understand and have sold the business in its entirety to javelin, including development of new products supply of their products et cetera.

We understand and have sold the business in its entirety to javan, including development of new products supply of their products et cetera.

It's just not a business that we're involved in.

and that's just not a business that we're involved in.

Seamus Grady: The immediate impact it's really too early to say. The news only become official a few days ago, so we have to sit down with our customer and walk out the transfer plans. And we're confident that in these situations, we provide a high level of service to our customers and in general we've become good at managing these type of transitions and usually find a way to come out on top.

The immediate impact it's really too early to say that he has only become officials.

The immediate impact it's really too early to say that he has only become officials. Few days ago, So we have to sit down with our customer and walk out the transfer plans. <unk>. And you. We're confident that in these situations, we provide a high level of service to our customers and in general we've become good at managing these type of transitions. Usually find a way to come out on top.

A few days ago, so we have to sit down with our customer and work out the transfer plans.

Few days ago, So we have to sit down with our customer and walk out the transfer plans.

<unk>.

And.

And you.

We're confident that in these situations, we provide a high level of service to our customers and in general we've become good at managing these type of transitions.

We're confident that in these situations, we provide a high level of service to our customers and in general we've become good at managing these type of transitions. Usually find a way to come out on top.

Usually find a way to just come out on top.

Usually find a way to come out on top.

Do you think that this represents an increase in table trying to get into the optical market or do you know, what's your assessment of the competitive implications of it.

Alexander B. Henderson: Do you think that this represents an increase in Jabil trying to get into the optical market? What's your assessment of the competitive implications of it?

Well, it's it's.

Seamus Grady: Well, it's a different business I guess to the business we're involved in. We manufacture other people's products. We have no interest in having our own products. So I would assume for Jabil, I don't want to want to speak for Jabil, but it appears to be more of an ODM type offering that they'll be providing and that's just not something that we're involved in so I would see it as a different market to the market that we're in, but we wish Jabil well.

So different business I guess to the business. We're involved in we manufacture other people's products, we have no interest in having our own products. So I would assume for example, and it's more of an order to want to speak for Jabil.

Appears to be more of an ODM type <unk>.

Here's to be more of an ODM type offerings, it seems to be providing. It's just not something that we're constantly so I would see it as a difference different markets to the market that we're in.

<unk> offerings, it's Anthony providing that's just not something that's new.

It's just not something that we're constantly so I would see it as a difference different markets to the market that we're in.

Clinton.

So I would see it as a difference different markets to the market that we're in.

But you know we wish you well.

I hope, there's not too much background noise I, just got out of a cab.

Alexander B. Henderson: I hope there's not too much background noise, I just got out of a cab. But I was hoping you could talk one more more question if I could and then I'll see the floor about any potential pipeline activity or thoughts on how to get into the Ethernet side of the 800 gig AI opportunity? Thanks.

I was hoping you could talk one more one more question if I could and then I'll cede the floor about any potential.

But I was hoping you could talk one more one more question if I could and then I'll see the floor about any potential. Pipeline activity or thoughts on how to get into the Ethernet side of the 800 gig AI opportunity. Thanks.

Pipeline activity or thoughts on how to get into the Ethernet side of the 800 gig AI opportunity. Thanks.

Well, we just really following our customers leads Alex.

Seamus Grady: Well, we just really following our customers leads Alex, whichever protocol the customers deemed to be the one that they want us to work on we're happy. We don't really mind whether the products are Ethernet or any other protocol, we don't really mind. So we work with our customers and we're working with I would say a number of customers in the space to make sure we continue to provide the products that they need and the volumes that they need but we really don't mind, whether it's Ethernet or Infiniband or anything else.

Ever.

You don't want to or whichever. Protocol to customers deemed to be the one that they want us to work on we're happy for all suite, we don't really mind. Whether the products are you know Ethernet ISR or any other protocols, we don't really mind. So we work with our customers our working. I would say a number of customers in this space to make sure we continue to provide the. The products that they need and the volumes that they need. We really don't mind, whether it's <unk>. <unk> are our infiniband or anything else.

Protocol customers deemed to be the one that they want us to work on <unk> for US, we we don't really mind.

Protocol to customers deemed to be the one that they want us to work on we're happy for all suite, we don't really mind. Whether the products are you know Ethernet ISR or any other protocols, we don't really mind. So we work with our customers our working. I would say a number of customers in this space to make sure we continue to provide the. The products that they need and the volumes that they need. We really don't mind, whether it's <unk>. <unk> are our infiniband or anything else.

Whether the products are you know Ethernet or any other protocols, we don't really mind.

Whether the products are you know Ethernet ISR or any other protocols, we don't really mind. So we work with our customers our working. I would say a number of customers in this space to make sure we continue to provide the. The products that they need and the volumes that they need. We really don't mind, whether it's <unk>. <unk> are our infiniband or anything else.

So we work with our customers and where we're working.

So we work with our customers our working. I would say a number of customers in this space to make sure we continue to provide the. The products that they need and the volumes that they need. We really don't mind, whether it's <unk>. <unk> are our infiniband or anything else.

I would say a number of customers in the space to make sure. We continue to provide the products that they need and the volumes that they need.

I would say a number of customers in this space to make sure we continue to provide the. The products that they need and the volumes that they need. We really don't mind, whether it's <unk>. <unk> are our infiniband or anything else.

The products that they need and the volumes that they need. We really don't mind, whether it's <unk>. <unk> are our infiniband or anything else.

We really don't mind, whether it's.

We really don't mind, whether it's <unk>. <unk> are our infiniband or anything else.

Ethernet or our infiniband or anything else well.

<unk> are our infiniband or anything else.

Well, yes, but your current 800 gig customer is almost exclusively infiniband and that'd be a link and obviously over time the world will shift towards <unk> and that so the question is do you have a hawk into that stream.

Yes, but your current 800 gig customer is almost exclusively Infiniband and then be link and obviously over time the world will shift towards Ethernet and so the question is, do you have a hook into that stream? We do indeed. We're working with, I would say a number of opportunities that we're working on now where people again want Infiniband, but also Ethernet based products.

Alexander B. Henderson: Yes, but your current 800 gig customer is almost exclusively Infiniband and then be link and obviously over time the world will shift towards Ethernet and so the question is, do you have a hook into that stream?

We do indeed.

We do indeed. We're working with. I would say a number a number of opportunities that we're working on now where people against Infiniband, but also Ethernet based products.

Seamus Grady: We do indeed. We're working with, I would say a number of opportunities that we're working on now where people again want Infiniband, but also Ethernet based products.

We're working with.

We're working with. I would say a number a number of opportunities that we're working on now where people against Infiniband, but also Ethernet based products.

I would say a number a number of opportunities that we're working on that where people against infiniband, but also Ethernet based products.

I would say a number a number of opportunities that we're working on now where people against Infiniband, but also Ethernet based products.

Great. Thank you. Thanks.

Alexander B. Henderson: Great. Thank you.

Thanks, guys.

Seamus Grady: Thanks, Alex.

And our world.

Okay. Yeah. Yeah.

Yeah. Yeah.

Thank you and one moment as we move to our next question.

Yeah.

Operator: Thank you. And one moment as we move to our next question.

And our next question will come from the line of Cemig chatter.

And our next question will come from the line of Samik Chatterjee with JP Morgan. Your line is open. Please go ahead.

Your line is open. Please go ahead.

Yes. Thank you. Thanks for taking my questions I guess to start off maybe I can follow up on Alex's question too.

Samik Chatterjee: Yes, thank you. Thanks for taking my questions. I guess to start off, maybe I can follow up on Alex's question here. Seamus, as you move towards working with customers on the Ethernet side, what are you finding relative to the competitive landscape just from the outside and from our perspective looks like more companies that are in the manufacturing supply chain integration being [inaudible] but can you share your thoughts about what are you seeing from a competitive aspect and what's sort of the differentiation that you bring to their internet ecosystem? And I have a follow up. Thank you.

Oh, she missed as you move towards working with customers on that you put it side what are you finding anything for the competitive landscape just from the outside and from our perspective looks like more companies that are in them.

She was Holly as you move towards working with customers on the Ethernet side. What are you finding anything for the competitive landscape just from the outside and from our perspective looks like more companies that are in the manufacturing. Supply chain integration being Tonight, but can you share your thoughts about what are you seeing from a competitive aspect. What's sort of the differentiation that you bring their internet ecosystem and I have a follow up thank you.

Manufacturing.

Supply chain integration being Tonight, but can you share your thoughts about what are you seeing from a competitive aspect.

Supply chain integration being Tonight, but can you share your thoughts about what are you seeing from a competitive aspect. What's sort of the differentiation that you bring their internet ecosystem and I have a follow up thank you.

What's sort of the differentiation that you bring data into that ecosystem and have a follow up thank you.

What's sort of the differentiation that you bring their internet ecosystem and I have a follow up thank you.

Yes, I think to make FERC for newer products, whether it's 800 gig or higher speeds.

Seamus Grady: Yes, I think Samik for newer products, whether it's 800 gig or higher speeds, we feel pretty confident that we're well positioned to support what the customers need. I think for older generation products, the competitive landscape is much more competitive but for new generation products, for these kind of specific short reach, low power low latency applications, there's really a handful of companies who are able to design these type of products and we're well positioned we think to support them.

We feel we feel pretty confident that we're well positioned to support what the customers need I think for older generation products.

We feel we feel pretty confident that we're well positioned to support what the customers need I think for older generation products. It's the competitive landscape is.

<unk>.

It's a competitive landscape is.

It's the competitive landscape is.

It's much more competitive for new generation products for these kind of specific short reach and short reach low power low latency applications. There's really a handful of companies who are able to design. These these type of products and we're well positioned we think to support them.

So again, whether its infiniband and Ethernet, which is part of our customers' needs wherever they need from US we're happy to.

So again, whether it's Infiniband or Ethernet, we just follow our customers' lead. Whatever they need from us we're happy to help them with. And again, our focus is always on producing the current generation products, but also winning the next generation products, so we're pretty focused on that with our customers in this space.

To help them with and again, our focus is always on producing the karnes generation products, but also winning the next generation products. So we're very focused on that with with her with our customers in this space.

Okay got it if I can.

Samik Chatterjee: Got it. If I can just ask as a follow up on the guidance going from 4Q to 1Q you had a sequential increase of about $30 million or so in revenue with Datacom easily including [inaudible] offsetting the telecom decline. As you look forward, I mean, you're carrying forward the same team that Datacom does offset telecom, but the magnitude of it seems to be much more given the 5 million sequential increase at the midpoint of your guidance. So maybe if you can help us with the puts and take there. Is telecom declining more than sort of what you've seen from 4Q to 1Q or is it the datacom more in brand because more grading just given that you've got maybe reaching more capacity with the customers that you're engaged with?

Just ask as a follow up on the guidance.

I can just ask as a follow up on the guidance going from four key <unk> you had a sequential increase of about $30 million or so in revenue with datacom easily including medical needs to be offsetting the telecom decline. As you look forward I mean, you're getting for what are the same team that datacom does offset telecom, but the magnitude of it seems to be much more.

Going from <unk>, you had a sequential increase of about 30.

30 million or so in revenue with datacom easily being through the medical needs to be offsetting the telecom decline.

As you look forward I mean, you're getting for what are the same team that datacom does offset telecom, but the magnitude of it seems to be much more.

Just given the 5 million sequential increase at the midpoint that you're guiding cause. So maybe if you can help us maybe puts and takes that its telecom declining more than sort of what you've seen from four people one SKU or is it the datacom in DRAM because more grading just given that you've got maybe reaching more capacity with the customer that they don't get engaged with thank you.

Given the 5 million sequential increase at the midpoint of your guidance. So maybe if you can help us maybe puts and take that as telecom declining more than sort of what you've seen from four people one SKU or is it the data more in brand because more grading just given that you've got maybe reaching more capacity with the customer that youre.

Engagement I.

Saying well first of all in Q1, our telecom declined probably less than we thought.

I would say well first of all, in Q1, our telecom declined probably less than we thought it would. It declined about 6%. Going into the quarter I guess, we thought it might decline more than that. It declined about 6%, which was primarily driven by stronger demand than anticipated for certain telecom programs, especially DCI. So again, driven by the data center on the under growth going on in the data center plus DCI products, which we categorize as telecom. That's the first thing. And then as we go into Q2, we think our telecom business will decline further. into Q2. As you know, we don't guide beyond one quarter at at time. But in a general sense, we think telecom will decline, datacom we will increase by more than that decline.

To try and about 6%.

It declined about 6%. We going into the quarter I guess, we thought it might decline more than that. Declined about 6%, which was primarily driven by stronger demand than. Some anticipated for certain telecom programs, especially Dci, So again driven by the data center on the under growth going on in the data Center Dci products, which we categorize as telecom. That's the first thing and then there's as we go into Q2 you are are we take our telecom.

We going into the quarter I guess, we thought it might decline more than that.

We going into the quarter I guess, we thought it might decline more than that. Declined about 6%, which was primarily driven by stronger demand than. Some anticipated for certain telecom programs, especially Dci, So again driven by the data center on the under growth going on in the data Center Dci products, which we categorize as telecom. That's the first thing and then there's as we go into Q2 you are are we take our telecom.

Declined about 6%, which was primarily driven by stronger demand.

Declined about 6%, which was primarily driven by stronger demand than. Some anticipated for certain telecom programs, especially Dci, So again driven by the data center on the under growth going on in the data Center Dci products, which we categorize as telecom. That's the first thing and then there's as we go into Q2 you are are we take our telecom.

Unanticipated for sharp and telecom programs, especially Dci, So again driven by the data center on the under growth going on in the data Center Dci products, which we categorize as telecom. That's the first thing and then there's as we go into Q2 you are are we take our telecom.

Some anticipated for certain telecom programs, especially Dci, So again driven by the data center on the under growth going on in the data Center Dci products, which we categorize as telecom. That's the first thing and then there's as we go into Q2 you are are we take our telecom.

Business will decline further.

Business will decline further. Into Q2 as you know, we don't guide beyond one quarter as time within a general sense. We think telecom will decline. Datacom, we will increase by more than that decline.

Into Q2 as you know, we don't guide beyond one quarter as time with in a general sense.

Into Q2 as you know, we don't guide beyond one quarter as time within a general sense. We think telecom will decline. Datacom, we will increase by more than that decline.

I think we think telecom will decline.

We think telecom will decline. Datacom, we will increase by more than that decline.

Datacom, we will increase by more than that decline.

And then as we look to the future.

And then as we look to the future, again, based on the intelligence we have from our customers, we think that telecom decline is set to continue probably until the middle of the calendar year, which would be the end of our fiscal year. So further declines this quarter and the next quarter and then we think it will begin to bottom out in call it the June quarter. And then the rate of growth of datacom I guess, it should slow down at some point. That rate of growth has been very strong for us but inevitably the growth would begin to slow at some point.

Again based on the intelligence, we have from our customers. We think the telecom decline is set to continue probably until the middle of the calendar year, which would be the end of our fiscal year. So. Further declines this quarter and on the next quarter and then we think it will begin to bottom out in the end we call. It the June quarter. And then the rate of growth of Datacom I guess, it should slow down at some point type of range of growth. It's been it's been very strong for us wanted when inevitably begin to.

Further declines this quarter and on the next quarter and then we think it will begin to bottom out in the end we call. It the June quarter.

Further declines this quarter and on the next quarter and then we think it will begin to bottom out in the end we call. It the June quarter. And then the rate of growth of Datacom I guess, it should slow down at some point type of range of growth. It's been it's been very strong for us wanted when inevitably begin to.

And then the rate of growth of Datacom I guess, it should slow down at some point salaries of growth. It's been it's been very strong for US wanted women inevitably begin too big.

And then the rate of growth of Datacom I guess, it should slow down at some point type of range of growth. It's been it's been very strong for us wanted when inevitably begin to.

Again, the growth would begin to slow at some point.

Begin to growth would begin to slow at some point.

Okay. Thank you thanks for taking my questions.

Samik Chatterjee: Okay. Thank you. Thanks for taking my questions.

Thank you so much.

Seamus Grady: No problem. Thank you Samit.

Thank you and one moment as we move on to our next question.

Operator: Thank you. And one moment as we move on to our next question.

And our next question is going to come from the line of Mike Vesey with Rosenblatt Securities. Your line is open. Please go ahead.

Oh, great. Thanks, Hi, Seamus.

Mike Vesey : Oh, great. Thanks. Hi, Seamus. Hi, Mike.

Mike Vesey : Oh, great. Thanks. Hi, Seamus.

Mike.

Seamus Grady: Hi, Mike.

Can you give us any commentary at all on kind of a performance breakout between.

Mike Vesey : Can you give us any commentary at all on kind of performance breakout between 400G and 800 gig datacom or new programs versus existing older programs? Is there any color we could get there?

Kind of performance breakout between four. <unk> G in 800 gig datacom or or new programs versus. Existing older programs is there is there any color we could get there.

408 hundred gig datacom or new programs versus existing.

<unk> G in 800 gig datacom or or new programs versus. Existing older programs is there is there any color we could get there.

Existing older programs is there is there any color we could get there.

And in general we break out 400 gig on a bolt on which of course at this point is a pretty large category at.

Seamus Grady: Well in general we break out our 400 gig on a [inaudible] which of course at this point is a pretty large category. At some point, we may want to revise how we do that, but for now, it is really everything in that 400 gig and above category. So 400 gig inside the data center, 400, ZR DCI, 800 gig AI, everything really in that 400 gig and above category, but the growth has been coming from primarily the higher speeds, newer programs, older programs and let's call it traditional datacom products have not been as strong, especially at the lower speeds 100 gig and the like. The growth for us certainly we don't speak for the whole industry, but for us the growth that we've seen has been primarily on the higher speed newer programs, mainly focused around these newer AI applications, 800 gig being the biggest the biggest driver for us there.

At some point, we may want to revise how we do that but for now.

At some point, we may want to revise how we do that but for now it is. Really everything in that 400 gig and above category. So a 400 gig inside the data center.

Really everything in that 400 gig and above category. So 400 gig inside the data center.

Really everything in that 400 gig and above category. So a 400 gig inside the data center.

400, ZR Dci 800 gig.

400, ZR Dci 800 gig. AI everything really in that 400 gig and above category, but the growth has been coming from primarily the higher speeds newer programs.

AI.

AI everything really in that 400 gig and above category, but the growth has been coming from primarily the higher speeds newer programs.

Really in that 400 gig and above category, but the growth has been coming from primarily the higher speeds newer programs.

Older older programs.

Older older programs. Call. It traditional datacom products have not been as strong, especially with the lower speeds 100 gig and the like. The growth for US certainly we don't we don't speak for the whole industry, but for US the growth that we've seen it's been primarily on the higher speed newer programs, mainly focused around these newer applications. 800 gig being the biggest the biggest driver for us there. Call. It traditional datacom products have not been as strong, especially with the lower speeds 100 gig and the like. The growth for US certainly we don't we don't speak for the whole industry, but for US the growth that we've seen it's been primarily on the higher speed newer programs, mainly focused around these newer applications. 800 gig being the biggest the biggest driver for us there.

Call. It traditional datacom products have not been as strong, especially with the lower speeds 100 gig and the like.

Call. It traditional datacom products have not been as strong, especially with the lower speeds 100 gig and the like. The growth for US certainly we don't we don't speak for the whole industry, but for US the growth that we've seen it's been primarily on the higher speed newer programs, mainly focused around these newer applications. 800 gig being the biggest the biggest driver for us there.

The growth for US certainly we don't we don't speak for the whole industry, but for US the growth that we've seen that's been primarily on the higher speed newer programs, mainly focused around these newer applications.

The growth for US certainly we don't we don't speak for the whole industry, but for US the growth that we've seen it's been primarily on the higher speed newer programs, mainly focused around these newer applications. 800 gig being the biggest the biggest driver for us there.

800 gig being the biggest the biggest driver for us there.

Perfect maybe I'd follow up on that question by because I thought the color you gave about telecom and.

Mike Vesey : Perfect. Maybe I'd follow up on that question because I thought the color you gave about telecom and DCI driving less, a decline in telecom but less than expected I mean that was a great color. So maybe comparing how telecom came in to all the older datacom programs, I mean was there any surprise on the upside there or downside or did it behave as expected?

In D C I driving.

In D C I driving. A decline in telecom, but when but less than expected I mean that was a great color. So maybe comparing how telecom came in to how the.

Yes.

And telecom, but when but less than expected I mean that was a great color. So maybe comparing how telecom came into how the.

A decline in telecom, but when but less than expected I mean that was a great color. So maybe comparing how telecom came in to how the.

The older data comm programs I mean was there any surprise on the upside there or did it behave or downside or they'd behave as expected.

I think the traditional the kind of traditional datacom I think behaved pretty much as expected.

Seamus Grady: The traditional datacom I think behaved pretty much as expected. Newer datacom has been just very strong but for us it's expected I think at this point. And then like I said earlier, the strength in DCI was maybe a little bit of a surprise. We had expected telecom to be down. If you just took the guidance from our customers going into the quarter and you just straight line that, we should have been down double digits, probably 12% to 15% in telecom. Instead, we were down about 6%. So down a lot less than we thought it would be. Again, primarily driven by my DCI so even though it's in telecom its driven by the data center expansion that's going on everywhere.

You know your Datacom has been just very strong book for Us Thats. Its expected I think at this point.

You know newer Datacom has been just very strong but for us. It's it's expected I think at this point. And then like I said earlier the strength in D. C. I was maybe a little bit of a surprise we had that we had expected telecom to be down. If you just took the guidance from our customers going into the quarter and you just straight line that we should have been down double digits, probably 12% to 15%. Telecom instead, we were down about 6%. So down a lot less than we thought it would be again, primarily driven by my Dcs. So even though it's in telecom its driven by the data center expansion that's going on everywhere.

And then like I said earlier the strength in D. C. I was maybe a little bit of a surprise we had that we had expected telecom to be down. If you just took the guidance from our customers going into the quarter and you just straight line that we should have been down double digits, probably 12% to 15%. Telecom instead, we were down about 6%. So down a lot less than we thought it would be again, primarily driven by my Dcs. So even though it's in telecom its driven by the data center expansion that's going on everywhere.

Telecom instead, we were down about 6%.

Telecom instead, we were down about 6%. So down a lot less than we thought it would be again, primarily driven by my Dcs. So even though it's in telecom its driven by the data center expansion that's going on everywhere.

So down a lot less than we thought it would be again, primarily driven by by Dci. So even though it's in telecom its driven by the data center expansion that's going on everywhere.

So down a lot less than we thought it would be again, primarily driven by my Dcs. So even though it's in telecom its driven by the data center expansion that's going on everywhere.

Got it okay, great and then finally for me just could you maybe fiber or <unk> or both of you talk.

Got it. Okay, great. And then finally for me just could you maybe Csaba or both of you talk about the decision to not buy back stock in the quarter and kind of going forward, what you're thinking about with buybacks?

Talk about just the decision to not buy back stock in the quarter and and you know kind of going forward, what you're thinking about with buybacks.

Talk about just you know the decision to not buy back stock in the quarter and and you know kind of going forward, what you're thinking about with buybacks.

Hey, Mike This is Josh.

Csaba Sverha: Hey, Mike. This is Csaba. Last quarter as I mentioned in our prepared remarks, we didn't buy anything back. We have obviously an OMR opportunity in the open window. In addition, we have an 10B5 plan in place. The 10B5 plan is rule based and subject to certain prices. Obviously, it didn't trigger last quarter, but obviously, we are still committed to returning surplus cash to our shareholders. So obviously, we are revisiting the 10B5 plan from time to time and subject to the new pricing and the market conditions, we will make amendments and we continue to be committed to return the surplus cash we generate to shareholders.

Last quarter as I mentioned in our prepared remarks, we didn't buy anything back.

Last quarter as I mentioned in our prepared remarks, we didn't buy anything back. We have obviously Oh EMR opportunity in the open window. In addition, we have with MB five plan in place that 75 plan is a rule based and subject to certain prices, obviously, it didnt trigger last quarter, but obviously, we are still committed to returning surplus. <unk> cash to our shareholders. So. Obviously, we are revisiting that amplify plan from time to time and are subject to the new pricing and the market conditions, we will make amendments and. We continue to be committed to return the surplus cash we generate to shareholders.

We have obviously Oh EMR opportunity in the open window. In addition, we have a term b five plan in place that <unk> five plan is a rule based and subject to certain prices, obviously, it didnt trigger last quarter, but obviously, we are still committed to return surplus.

We have obviously Oh EMR opportunity in the open window. In addition, we have with MB five plan in place that 75 plan is a rule based and subject to certain prices, obviously, it didnt trigger last quarter, but obviously, we are still committed to returning surplus. <unk> cash to our shareholders. So. Obviously, we are revisiting that amplify plan from time to time and are subject to the new pricing and the market conditions, we will make amendments and. We continue to be committed to return the surplus cash we generate to shareholders.

Cash to our shareholders. So.

<unk> cash to our shareholders. So. Obviously, we are revisiting that amplify plan from time to time and are subject to the new pricing and the market conditions, we will make amendments and. We continue to be committed to return the surplus cash we generate to shareholders.

Obviously, we are revisiting that amplify plan from time to time and are subject to the new pricing and the market conditions, we will make amendments and.

Obviously, we are revisiting that amplify plan from time to time and are subject to the new pricing and the market conditions, we will make amendments and. We continue to be committed to return the surplus cash we generate to shareholders.

We continue to be committed to return the surplus cash we generate to shareholders.

Excellent great well thanks for thanks for letting me ask the questions I appreciate it.

Mike Vesey : Okay, great. Well thanks for letting me ask the questions. I appreciate it.

Alright, Thanks, Mike Thank you.

Csaba Sverha: You're welcome. Thank you.

Thank you.

Operator: Thank you. And again, if you would like to ask a question at this time, please press star one, one on your telephone. One moment for our next question.

And again, if you would like to ask a question at this time. Please press star one on your telephone one moment for our next question.

Operator: And again, if you would like to ask a question at this time. Please press star one on your telephone one moment for our next question.

And our next question is going to come from the line of Tim <unk> with.

And our next question is going to come from the line of Tim Savageaux with Northland Capital Markets. Your line is open. Please go ahead.

Northland Capital markets. Your line is open. Please go ahead.

Northland Capital Markets. Your line is open. Please go ahead.

Hey, good afternoon, and congrats on the results a couple of questions.

Timothy Paul Savageaux: Hey, good afternoon, and congrats on the results. A couple of questions, you had previously described the AI connectivity opportunity I think at 800 gig or maybe just in general as in very early stages and in a very large opportunity. Actually I may be missing a few verys there.

And you had previously described the.

You had previously described the. AI connectivity opportunity I think 800 gig or maybe just in general.

AI connectivity opportunity I think 800 gig or maybe just in general.

In very early stages and in a very large opportunity actually may be missing a few varies there. Yes, I think I think at one point in time, maybe said very twice haven't got pulled off the very very.

Seamus Grady: Yes, I think at one point I maybe said very twice. Very, very early stages.

Pretty stable.

Timothy Paul Savageaux: Well, I guess as we've moved forward a few months here into the end of the year, would you add or subtract any verys at this point or can you give us your current assessment of where Fabrinet is in terms of the ramp and how that opportunity is looking relative to what you were seeing previously?

Well I guess as you as we've moved forward a few months here into the end of the year.

Well I guess as you. As we've moved forward a few months here into the end of the year. Would you add or subtract any various at this point or can you give us your current assessment. Where fabric that is in terms of the ramp and how that opportunity is looking relative to what you were seeing previously.

As we've moved forward a few months here into the end of the year. Would you add or subtract any various at this point or can you give us your current assessment. Where fabric that is in terms of the ramp and how that opportunity is looking relative to what you were seeing previously.

Would you add or subtract any variance at this point or can you give us your current assessment.

Would you add or subtract any various at this point or can you give us your current assessment.

Where fabric that is in terms of the ramp and how that opportunity is looking relative to what you were assuming previously.

Where fabric that is in terms of the ramp and how that opportunity is looking relative to what you were seeing previously.

I think.

Seamus Grady: I think we're still very optimistic about, you can start to remove as many verys as you like and we're still very, very optimistic about the market in general. I would say the optical interconnect opportunity for artificial intelligence applications and really our position within that, we're building the products for the leader in the industry, it's their own design, their own product and I know they have other choices, but for now at least we believe they are quite committed to sourcing from us. We're still ramping and we continue to ramp I'd say existing programs, plural, and there's additional business that we're looking at getting qualified on. As you know, we're maniacally focused on executing the business that we've already won but then on making sure we win the next generation programs, the new products. So we're working very, very hard on both of those, both on executing and I think we've done a pretty good job there, may be a very, very good job executing and we're also making sure we win the next generation products and then execute on those. The best way to stay ahead of the competition is just work like crazy to delight the customer and make sure we do a great job and win the next generation products. So that's really our focus and we see a lot of kind of runway ahead of us and we think it's a really good opportunity for us.

We were you know we're still very optimistic about.

We were you know we're still very optimistic about. You know you can to charts and start to remove as many varies as you like search and we're still very very optimistic about.

You know you can see the charts and sharp to remove as many variances you liked their timber so very very optimistic about.

You know you can to charts and start to remove as many varies as you like search and we're still very very optimistic about.

The market in general I would say the AP interconnect the optical interconnect opportunity for artificial intelligence applications and really our position within that.

The market in general I would say the interconnect the optical interconnect opportunity for artificial intelligence applications and really our position within that.

We're building.

The products for the lead to leader in the industry, it's their own design their own product and I know they have other choices, but for now at least we believe there are quite committed to sourcing.

The products hard delete the leader in the industry, it's their own design their own product and I know they have other choices, but for now at least we believe there are quite committed to sourcing from us.

We're still we're still ramping we continue to ramp partly existing.

We're still we're still ramping and we continue to ramp partly existing. Exists, let's say existing programs.

That's the existing programs.

Exists, let's say existing programs.

<unk> traditional business, that's where we're looking at.

and there's additional business that we're looking at getting qualified on. As you know, we're maniacally focused on executing the business that we've already won but then on making sure we win the next generation programs, the new products. So we're working very, very hard on both of those, both on executing and I think we've done a pretty good job there, may be a very, very good job executing and we're also making sure we win the next generation products and then execute on those. The best way to stay ahead of the competition is just work like crazy to delight the customer and make sure we do a great job and win the next generation products. So that's really our focus and we see a lot of kind of runway ahead of us and we think it's a really good opportunity for us.

Getting qualified on as you know, we're we're maniacally focused on executing the business that we've already won but then on making sure. We win the next generation programs to new products. So we're working very very hard on both of those 10 bolt on executing I think we've done a pretty good job there may be a very very good job executing and we're also.

Getting qualified on as you know, we're maniacally focused on executing the business that we've already won but then on making sure. We win the next generation programs to new products. So we're working very very hard on both of those 10, both on executing and I think we've done a pretty good job there may be a very very good job executing and we're also. So making sure we. You know when the next generation products and then execute Barnwell on those is the best way to stay ahead of the competition is just you know work like crazy to delight the customer. Make sure we do great job and when the next generation products. So that's really our focus. We see a lot of kind of runway ahead of us and we think it's a really good opportunity for us.

So making sure we.

So making sure we. You know when the next generation products and then execute Barnwell on those is the best way to stay ahead of the competition is just you know work like crazy to delight the customer. Make sure we do great job and when the next generation products. So that's really our focus. We see a lot of kind of runway ahead of us and we think it's a really good opportunity for us.

You know when the next generation products and then execute very well on those is the best way to stay ahead of the competition is just you know worked like crazy to to delight the customer.

You know when the next generation products and then execute Barnwell on those is the best way to stay ahead of the competition is just you know work like crazy to delight the customer. Make sure we do great job and when the next generation products. So that's really our focus. We see a lot of kind of runway ahead of us and we think it's a really good opportunity for us.

Make sure we do great job and when the next generation products. So that's really our focus and where we see a lot of kind of runway ahead of us and we think it's a really good.

Make sure we do great job and when the next generation products. So that's really our focus. We see a lot of kind of runway ahead of us and we think it's a really good opportunity for us.

We see a lot of kind of runway ahead of us and we think it's a really good opportunity for us.

Really for us.

Great I appreciate that.

Timothy Paul Savageaux: Great, I appreciate that. And just a follow up, I think you'd gotten within shouting distance of 10% of revenue for you guys before the latest inventory correction. Given that you've called it out as kind of the source of unexpected growth in the quarter, maybe you can give us an update on kind of where that stands in terms of materiality of the overall business or telecom or however you want to talk about it and I just got one more quick follow up after that.

Just a follow up.

Just a follow up. I know they are I think you'd gotten. Within shouting distance of 10% of revenue for you guys before the latest inventory correction. Given that you've called it out as kind of the source of unexpected growth in the quarter. Maybe you can give us an update on kind of where that stands in terms of materiality of the <unk>. Overall business or telecom or however, you want to talk about it and I just got one more quick follow up after that.

I know they are I think you've gotten.

I know they are I think you'd gotten. Within shouting distance of 10% of revenue for you guys before the latest inventory correction. Given that you've called it out as kind of the source of unexpected growth in the quarter. Maybe you can give us an update on kind of where that stands in terms of materiality of the <unk>. Overall business or telecom or however, you want to talk about it and I just got one more quick follow up after that.

Within shouting distance of 10% of revenue for you guys before the latest inventory correction.

Within shouting distance of 10% of revenue for you guys before the latest inventory correction. Given that you've called it out as kind of the source of unexpected growth in the quarter. Maybe you can give us an update on kind of where that stands in terms of materiality of the <unk>. Overall business or telecom or however, you want to talk about it and I just got one more quick follow up after that.

Given that you've called it out as kind of the source of unexpected growth in the quarter. Maybe you can give us an update on kind of where that stands in terms of materiality of the <unk>.

Given that you've called it out as kind of the source of unexpected growth in the quarter. Maybe you can give us an update on kind of where that stands in terms of materiality of the <unk>. Overall business or telecom or however, you want to talk about it and I just got one more quick follow up after that.

Overall business or telecom or however, you want to talk about it and I just got one more quick follow up after that.

Yes, I think to see our pharmacy are is very strong for us we haven't we haven't broken that out yet as a separate category, but it is.

Seamus Grady: Yeah, I think the ZR is very strong for us. We haven't broken it out yet as a separate category, but it is quite strong for us and continues to grow. It doesn't necessarily grow in a straight line so they'll maybe be still a little bit of stops and starts with ZR. We're just very happy to be participating in this and the source of really most of that offset between the one part we would've expected last quarter, that kind of down 12% to 15% the difference between that and where we ended up was primarily 400 ZR for DCI applications. So we still think it's early days. We have a number of customers and a number of programs there. We continue to ramp those and they're not all at the same stage. Some are ahead, some are just getting quantified, but we still think 400ZR is a good runway for us.

It is because it is quite strong for us and continues to grow it doesn't it doesn't necessarily grow on a straight line. So there'll be there'll be maybe still a little bit of stops and starts with 400 ZR, but you know, we're just very happy to be participating in this and as the source of.

It is because it is quite strong for us and continues to grow it doesn't it doesn't necessarily grow in a straight line. So there'll be there'll be maybe still a little bit of stops and starts with 400 C. R. You know, we're just very happy to be participating in this and as the source of. Really most of that offset between the odd part we would've expected last quarter. With that kind of down 12% to 15% the difference between the us and where we ended up Christmas primarily 400 ZR for Dci applications. So. So we still think it's early days, we have a number of customers on a number of programs. There are we can we continue to. Ramp those and they're not all at the same stage summer had summer just getting quantified. We still think four hundreds of hours of groups. That's good runway left for us.

You know, we're just very happy to be participating in this and as the source of. Really most of that offset between the odd part we would've expected last quarter. With that kind of down 12% to 15% the difference between the us and where we ended up Christmas primarily 400 ZR for Dci applications. So. So we still think it's early days, we have a number of customers on a number of programs. There are we can we continue to. Ramp those and they're not all at the same stage summer had summer just getting quantified. We still think four hundreds of hours of groups. That's good runway left for us.

Really most of that offset between the auto part we would've expected last quarter.

Really most of that offset between the odd part we would've expected last quarter. With that kind of down 12% to 15% the difference between the us and where we ended up Christmas primarily 400 ZR for Dci applications. So. So we still think it's early days, we have a number of customers on a number of programs. There are we can we continue to. Ramp those and they're not all at the same stage summer had summer just getting quantified. We still think four hundreds of hours of groups. That's good runway left for us.

Is that kind of down 12% to 15% the difference between the us and where we ended up Christmas primarily 400, it's a euro for Dci applications.

With that kind of down 12% to 15% the difference between the us and where we ended up Christmas primarily 400 ZR for Dci applications. So. So we still think it's early days, we have a number of customers on a number of programs. There are we can we continue to. Ramp those and they're not all at the same stage summer had summer just getting quantified. We still think four hundreds of hours of groups. That's good runway left for us.

So we still think it's early days, we have a number of customers and a number of programs there and we can we continue to.

So we still think it's early days, we have a number of customers on a number of programs. There are we can we continue to. Ramp those and they're not all at the same stage summer had summer just getting quantified. We still think four hundreds of hours of groups. That's good runway left for us.

Ramp those and they're not all at the same stage summer had some are just getting quantified.

Ramp those and they're not all at the same stage summer had summer just getting quantified. We still think four hundreds of hours of groups. That's good runway left for us.

We still think four hundreds of hours of groups is good runway left for us.

We still think four hundreds of hours of groups. That's good runway left for us.

That's good runway left for us.

Well and this wasn't going to be my question, but I'm not.

Timothy Paul Savageaux: Well, this wasn't going to be my question, but now that you mention it, should we look at this sort of ZR thing as kind of a blip that's coming in and coming back out? Are you seeing weakness elsewhere across telecom as you look forward into your December quarter guide and continued growth in ZR?

Now that you mention it.

Now that you mention it. Should we look at this sort of thing is kind of a blip, that's coming in and coming back out where you're seeing weakness elsewhere across telecom as you look forward into your. December quarter guide and continued growth in CR.

Should we look at this sort of thing is kind of a blip, that's coming in and coming back down here, you're seeing weakness elsewhere across telecom as you look forward into your.

Should we look at this sort of thing is kind of a blip, that's coming in and coming back out where you're seeing weakness elsewhere across telecom as you look forward into your. December quarter guide and continued growth in CR.

December quarter guide and continued growth in CR.

Yeah, I think we have you know as I said earlier, we still see continued weakness in telecom generally I think were it not for 400 ZR there'll be it will be even more weakness because that's where you get the traditional telecom traditional telecom product suite, we see continued softness in the December quarter, and I'm reading out.

Seamus Grady: I think we have, as I said earlier, we still see continued weakness in telecom generally. I think were it not for ZR there would be even more weakness. That's where you get the traditional telecom product suite, we see continued softness in the December quarter and I'm really hoping to see that probably out into the middle of next year, and we think it will start to level out.

Probably out into the middle of next year, and we think it will start to level off.

Probably out into the middle of next year, and we think it will start to level out.

Got it and last question for me is given the growth that you've seen in and the kind of metrics you've discussed in the past.

Timothy Paul Savageaux: Got it. And last question for me is given the growth that you've seen and the kind of metrics you've discussed in the past, where do we stand in terms of major additional capacity additions in your facility?

Where do we stand in terms of.

Or where do we stand in terms of. Major initiatives additional capacity additions.

Major insurers additional capacity additions.

Major initiatives additional capacity additions.

The facility.

And your facility.

It seems in our funding and in a way it seems crazy because we're even we're even talking about it.

Seamus Grady: In a way it seems crazy that we're even talking about it. It is something we have to keep a close eye on as we ramp. It seems like it's a blink of an eye ago as we've opened spending in Chonburi, it's now completely full and building nine is off to a flying start. So we'll be keeping a close eye on that. I think in all probability you could say well, if we pulled the trigger too early part of the implications of that, they're very small indications really.

It is it is something we have to keep a close eye on as we as we ramp.

It is it is something we have to keep a close eye on as we as we ramp. It seems like it's a blink of an eye. Because we've opened spending as in in.

It seems like the blink of an eye.

It seems like it's a blink of an eye. Because we've opened spending as in in.

I know you've opened spending as in in Chonburi, It's now completely full.

Because we've opened spending as in in.

In Chonburi, it's now completely full on building building nine is off to a flying start so we'll be keeping a close eye on that.

You know building building nine is off to a flying start so we'll be keeping a close eye on that.

I think and.

No I think. In all probability. You could say well if we even if we pulled the trigger too early part of the implications of that. They're very very small indications really.

And all in all probability.

In all probability. You could say well if we even if we pulled the trigger too early part of the implications of that. They're very very small indications really.

You could say well if we could pull the trigger to early part of the implications of that.

You could say well if we even if we pulled the trigger too early part of the implications of that. They're very very small indications really.

They're very very small indications really.

So typically what we said in the past is once we get to 70% utilization in our last building, we'll build another building.

So typically what we've said in the past is once we get to 70% utilization in our last building, we'll build another building. Whether we do that this time around or we pull the trigger a little earlier remains to be seen. I'd say stay tuned over the next couple of quarters. It's not going to take us five years or anything like that to get to capacity and building nine. We're off to a great start there. I was there last weekend. The facilitations going on in building nine and the expansion is just amazing and it's really encouraging to see. Whether it was good look or good planning on our part I think our timing on building nine was as it turns out exactly right. A little bit of luck never hurt anyone. So we'll be keeping a close eye on that Tim. Once we do make that decision we'll communicate it on this call in due course. But you know again the cost would be subject to [inaudible] would say if I put a range on the $50 million to $60 million for another 1 million square feet and about a one year to 18 months time horizon I would say yeah, that's something we'll be keeping a close eye on there.

You know what do we do that this time around or how do we.

You know what do we do that this time around or how do we you know. Pulled the trigger and has it been around here remains to be seen but I think were you know. I'd say stay tuned over the next couple of quarters. It's not going to take us five years or anything like that to get to capacity and building nine. We're off to a great start there I was there last weekend. You know the.

What is the trigger and it had been earlier remains to be seen but I think were you know.

Pulled the trigger and has it been around here remains to be seen but I think were you know. I'd say stay tuned over the next couple of quarters. It's not going to take us five years or anything like that to get to capacity and building nine. We're off to a great start there I was there last weekend. You know the.

Stay tuned over the next couple of quarters.

I'd say stay tuned over the next couple of quarters. It's not going to take us five years or anything like that to get to capacity and building nine. We're off to a great start there I was there last weekend. You know the.

It's not going to take us five years or anything like that to get to capacity and building nine.

It's not going to take us five years or anything like that to get to capacity and building nine. We're off to a great start there I was there last weekend. You know the.

We're off to a great start there I was there last weekend.

We're off to a great start there I was there last weekend. You know the.

The the.

You know the.

Facilitations, what's going on in building nine in the expansion is just amazing and it's real.

The facilitations going on in building nine and the expansion is just amazing and it's really encouraging to see. Whether it was good look or good planning on our part I think our timing on building nine was as it turns out exactly right. A little bit of luck never hurt anyone. So we'll be keeping a close eye on that Tim. Once we do make that decision we'll communicate it on this call in due course. But you know again the cost would be subject to [inaudible] would say if I put a range on the $50 million to $60 million for another 1 million square feet and about a one year to 18 months time horizon I would say yeah, that's something we'll be keeping a close eye on there.

It's really encouraging to see them.

Whether it was good look or good planning on our part I think our timing on building nine months as it turns out is exactly right.

Whether it was good look or good planning on our part I think our timing on building nine months as it turns out is exactly right. Look I take number of her honeymoon. So we'll be keeping a close eye on that Tim.

Look I take number her honeymoon.

Look I take number of her honeymoon. So we'll be keeping a close eye on that Tim.

We'll be we'll be keeping a close eye on that Tim.

So we'll be keeping a close eye on that Tim.

You know once we do make that decision we communicated on this call and to course, but you know again the cost would be subject to job of correcting me I would say if I put a range on the $50 million to $60 million.

Once we do make that decision we communicated on this call and to course, but you know again the cost would be subject to job of correcting me I would say if I put a range on the $50 million to $60 million. For another 1 million square feet. About one year to 18 months time horizon. Yeah, that's something we'd be keeping a close eye on time.

For another 1 million square feet.

For another 1 million square feet. About one year to 18 months time horizon. Yeah, that's something we'd be keeping a close eye on time.

In about one year to 18 months time horizon.

About one year to 18 months time horizon. Yeah, that's something we'd be keeping a close eye on time.

Okay, Yeah, that's something we'd be keeping a close eye on time.

Yeah, that's something we'd be keeping a close eye on time.

Great. Thanks, very much thank you Tim.

Timothy Paul Savageaux: Great. Thanks very much. Thank you Tim.

Timothy Paul Savageaux: Great. Thanks very much.

Seamus Grady: Thank you Tim.

Thank you and one moment for our next question.

Operator: Thank you. And one moment for our next question.

And we have a follow up question from the line of semi chatterji with J P. M. Your line is open. Please go ahead.

And we have a follow up question from the line of Samik Chatterjee with JPM. Your line is open. Please go ahead.

Oh, hi, thanks for taking the follow ups I'll be quick I promise just on.

Samik Chatterjee: Hi, thanks for taking the follow ups. I'll be quick, I promise. Just Csaba any color on I know you mentioned the gross margin sequentially because of the merit increases, but as you embed that now into the cost structure puts and takes of how to think about gross margin going forward. And then Seamus either you or for Csaba is about the automotive revenue declining and you said it's going to decline modestly, is that more of a temporary production led headwind or is this a fall off of the legacy programs while [inaudible] programs. Thank you for any clarification on those two items.

Just on <unk>. Any. Color on I know you mentioned, the gross margin mortgages sequentially because of the merit increases, but as you embed that known to the cost structure or puts and takes of how to think about gross margin going forward and then seamless either you or for you is how about like the automotive revenue declining and you said you're going to. Modestly is that more of a temporary production led headwind or is this a well.

How about any color.

Any. Color on I know you mentioned, the gross margin mortgages sequentially because of the merit increases, but as you embed that known to the cost structure or puts and takes of how to think about gross margin going forward and then seamless either you or for you is how about like the automotive revenue declining and you said you're going to. Modestly is that more of a temporary production led headwind or is this a well.

Hello, Ron.

Color on I know you mentioned, the gross margin mortgages sequentially because of the merit increases, but as you embed that known to the cost structure or puts and takes of how to think about gross margin going forward and then seamless either you or for you is how about like the automotive revenue declining and you said you're going to. Modestly is that more of a temporary production led headwind or is this a well.

I know you mentioned the gross margin mortgages sequentially because of the merit increases, but as you embed that known can be cost structure puts and takes of how to think about gross margin going forward and then she must either you or how about like the automotive revenue declining and you said you can declined modestly.

Modestly is that more of a temporary production led headwind or is this a well.

Is that more of a temporary production, let headwind or is this it.

Well fall off of the legacy programs, while important is continuing under new programs. So any clarification on those two items, maybe I'll take the automotive question first and then I'll, let Trevor.

a fall off of the legacy programs while [inaudible] programs. Thank you. Any clarification on those two items.

Seamus Grady: Maybe I'll take the automotive question first and then I'll let Csaba discuss the gross margin. We saw some I would call it inventory digestion going on in automotive this past quarter, we think it's primarily temporary so maybe another another a quarter or so of inventory digestion, but nothing to get too concerned about. We remain optimistic about our EV charging business overall but like any business that's ramping there's a bit of inventory digestion going on. If you look at our overall revenue, we've always said we're around kind of the 90 million mark since we overcame the component charges a couple of quarters ago. So it's been pretty stable actually if you look at the last few quarters. In our Q3, we were at $94 million of automotive revenue. Q4 was 93, and then Q1 was 88, so not a huge amount of variation kind of normal variability as our customers go through inventory digestion I would say. But overall, we remain optimistic about that business.

Just close to gross margin.

As discussed the gross margin. We saw some I would call it inventory digestion going on in automotive. This past quarter. We think it's primarily temporary so maybe another another a corker sullivan of inventory digestion, but nothing none.

We saw some I would call it inventory digestion going on in automotive.

We saw some I would call it inventory digestion going on in automotive. This past quarter. We think it's primarily temporary so maybe another another a corker sullivan of inventory digestion, but nothing none.

This past quarter.

This past quarter. We think it's primarily temporary so maybe another another a corker sullivan of inventory digestion, but nothing none.

We think it's primarily temporary so maybe another another a corker sullivan of inventory digestion, but nothing.

We think it's primarily temporary so maybe another another a corker sullivan of inventory digestion, but nothing none.

To get too concerned about.

to get too concerned about. We remain optimistic about our EV charging business overall but like any business that's ramping there's a bit of inventory digestion going on. If you look at our overall revenue, we've always said we're around kind of the 90 million mark since we overcame the component charges a couple of quarters ago. So it's been pretty stable actually if you look at the last few quarters. In our Q3, we were at $94 million of automotive revenue. Q4 was 93, and then Q1 was 88, so not a huge amount of variation kind of normal variability as our customers go through inventory digestion I would say. But overall, we remain optimistic about that business.

You know, we remain optimistic about our EV charging business overall.

You know, we we remain optimistic about our EV charging business overall. Like any business Thats ramping it's you know it's. So there's a bit of inventory digestion going on if you look at our overall revenue. We've always said we were around kind of 90 to 90 million Mark since we since we overcame the component charges a couple of quarters ago. So it's been pretty stable actually if you look at the last few quarters. And in our Q3, we were at $94 million of automotive revenue lost sorry. Sorry, Q4 was <unk> 93, and then Q1 was was ata's so not a huge amount of variation kind of normal variability as our customers go through inventory inventory digestion I would say. But overall we remain. We remain optimistic about that business.

But like any business Thats ramping it's you know it's.

Like any business Thats ramping it's you know it's. So there's a bit of inventory digestion going on if you look at our overall revenue. We've always said we were around kind of 90 to 90 million Mark since we since we overcame the component charges a couple of quarters ago. So it's been pretty stable actually if you look at the last few quarters. And in our Q3, we were at $94 million of automotive revenue lost sorry. Sorry, Q4 was <unk> 93, and then Q1 was was ata's so not a huge amount of variation kind of normal variability as our customers go through inventory inventory digestion I would say. But overall we remain. We remain optimistic about that business.

It's a little bit of inventory.

So there's a bit of inventory digestion going on if you look at our overall revenue. We've always said we were around kind of 90 to 90 million Mark since we since we overcame the component charges a couple of quarters ago. So it's been pretty stable actually if you look at the last few quarters. And in our Q3, we were at $94 million of automotive revenue lost sorry. Sorry, Q4 was <unk> 93, and then Q1 was was ata's so not a huge amount of variation kind of normal variability as our customers go through inventory inventory digestion I would say. But overall we remain. We remain optimistic about that business.

Gesturing going on if you look at our overall revenue. We've always said we were around kind of nine to 19 million Mark since we since we overcame the component charges a couple of quarters ago.

So it's been pretty stable actually if you look at the last few quarters.

So it's been pretty stable actually if you look at the last few quarters. And in our Q3, we were at $94 million of automotive revenue lost sorry. Sorry, Q4 was <unk> 93, and then Q1 was was ata's so not a huge amount of variation kind of normal variability as our customers go through inventory inventory digestion I would say. But overall we remain. We remain optimistic about that business.

And in our Q3, we were we had $94 million of automotive revenue lost.

And in our Q3, we were at $94 million of automotive revenue lost sorry. Sorry, Q4 was <unk> 93, and then Q1 was was ata's so not a huge amount of variation kind of normal variability as our customers go through inventory inventory digestion I would say. But overall we remain. We remain optimistic about that business.

Sorry, Q4 was <unk> 93, and then Q1 was was ata's so not a huge amount of variation kind of enormous variability as our customers go through inventory inventory digestion I would say.

Sorry, Q4 was <unk> 93, and then Q1 was was ata's so not a huge amount of variation kind of normal variability as our customers go through inventory inventory digestion I would say. But overall we remain. We remain optimistic about that business.

But overall we remain.

But overall we remain. We remain optimistic about that business.

We remain optimistic about that business.

Regarding gross margins.

Csa: Regarding gross margins Samik, obviously as you know there are lots of puts and takes there in the gross margin and this last fiscal quarter we had head winds as usual for [inaudible] inquiries and our gross margin came in as we had anticipated it at 12.6%. And obviously, we are working hard to make sure that we continue to execute well efficiently provide cost reductions for our customers and also make sure that we manage the mix of business to deliver industry-leading margins. I think we have done a good job there in the last couple of years.

Obviously as you know there are a lot of the lots of puts and takes in the gross margin in this last fiscal quarter. We had head winds is usually from let it increases and gross margin came in as we had anticipated at 12, 6% and obviously, we are working hard to make sure that we continue to execute well efficiently.

Obviously as you know there are a lot of the lots of puts and takes in the gross margin in this last fiscal quarter. We had head winds is usually for all medical inquiries and our gross margin came in as we had anticipated it to up 6%.

And obviously, we are working hard to make sure that we continue to execute well efficiently provide cost reductions for our customers and also make sure that we manage the mix and mix of business due to deliver industry, leading margins I think we have done a good job there in the last couple of years.

Cost reductions for our customers and also make sure that we manage the mix and mix of business due to deliver industry, leading margins I think we have done a good job there in the last couple of years.

But obviously there are a couple of factors to be mindful that may resolve some seasonality is like the merit increases in the first quarter. It's also subject to foreign exchanges, which have been a tailwind in the past and then be managed to overcome the temporary headwinds there as well. So there are lots of puts some things, but we are optimistic that we can maintain this.

Obviously, there are a couple of factors to be mindful that may resolve some seasonalities like the merit increases in the first quarter. It's also subject to foreign exchanges, which have been a tailwind in the past and then we managed to overcome all the temporary headwinds there as well. So there are a lot of puts and takes but we are optimistic that we can maintain this middle at about $12.5 and round about gross margin on [inaudible]. We're working hard to make sure that we continue to deliver on the operating margins as we scale the business and accomplish our roadmap for growth.

I'm, sorry headwinds there as well so. Also put some things, but we are optimistic that we can maintain this oh middle at about $12 five and there are round about gross margin on balls. Working hard to make sure that we continue to deliver. On the operating margins as we scale the business and. Accomplish. Our roadmap for growth. Working hard to make sure that we continue to deliver. On the operating margins as we scale the business and. Accomplish. Our roadmap for growth.

Also put some things, but we are optimistic that we can maintain this oh middle at about $12 five and there are round about gross margin on balls. Working hard to make sure that we continue to deliver. On the operating margins as we scale the business and. Accomplish. Our roadmap for growth. Working hard to make sure that we continue to deliver. On the operating margins as we scale the business and. Accomplish. Our roadmap for growth.

Middle at about $12 five mm.

Around about gross margin on balls.

Working hard to make sure that we continue to deliver.

Working hard to make sure that we continue to deliver. On the operating margins as we scale the business and. Accomplish. Our roadmap for growth.

On the operating margins as we scale the business and.

On the operating margins as we scale the business and. Accomplish. Our roadmap for growth.

Accomplish our roadmap for growth.

Accomplish. Our roadmap for growth.

Our roadmap for growth.

Thank you thanks for taking the questions.

Samik Chatterjee: Thank you. Thanks for taking the questions.

Thanks, Thank you and one moment for our next question.

Operator: Thank you. And one moment for our next question.

And our next question comes from the line of Dave Kang with B Riley. Your line is open. Please go ahead.

Hi, yes. Thank you.

Dave Kang: Hi, yes, thank you. First question is regarding your 400 gig plus revenue of $322 million, what is the rough split between datacom versus telecom? We typically don't break out and provide that breakdown, but obviously as you appreciate what we have communicated in the past, datacom growth in that space has been obviously far more than the telecom growth. So you would think datacom is going to be much stronger in that area, but we haven't provided a breakdown on that.

Dave Kang: Hi, yes, thank you. First question is regarding your 400 gig plus revenue of $322 million, what is the rough split between datacom versus telecom?

Our first question is regarding your 400 gig plus revenue.

First question is regarding your 400 gig plus revenue. $322 million, what is the rough split between Datacom versus telecom.

Coming I got $22 million.

$322 million, what is the rough split between Datacom versus telecom.

What is the rough split between Datacom versus telecom.

Csaba Sverha: We typically don't break out and provide that breakdown, but obviously as you appreciate what we have communicated in the past, datacom growth in that space has been obviously far more than the telecom growth. So you would think datacom is going to be much stronger in that area, but we haven't provided a breakdown on that.

We typically don't break out.

And we typically don't break out and provide that breakdown, but obviously as you I appreciate that what we have communicated in the bus datacom growth in that space have been. All of those can be far more than the telecom growth. So you would you would think a datacom is going to be much stronger in that area, but we haven't provided a breakdown on that.

Provide that breakdown, but obviously as you I appreciate that what we have communicated in the bus datacom growth in that space have been.

Obviously far more than the telecom growth. So you would think a datacom is going to be much stronger in that area, but we haven't provided a breakdown on that.

All of those can be far more than the telecom growth. So you would you would think a datacom is going to be much stronger in that area, but we haven't provided a breakdown on that.

Right and then on the telecom portion of that 400 gig plus I mean.

Dave Kang: Right. And then on the telecom portion of that 400 gig plus, I mean, is it growing or is it going through inventory pressure? Any color on that segment?

What portion of that 400 gig plus I mean. Is it growing or is it going through inventory question any color on that segment.

Is it growing or is it going through inventory question any color on that segment.

I think we touched on that as well that the.

Csaba Sverha: I think we touched on that as well that the traditional telecom business, that's not DCI as we typically would include that in the telecom segment has been going through inventory digestion and has been there for a while and we continue to see a headwind been there. But our DCI and 400 ZR, particularly have been very strong over the last couple of quarters and so we continue to be optimistic on that space. So I think again, the puts and takes there is traditional telecom still experiencing headwinds and other datacom, which is again driven by the data center DCI is going strong for us.

Traditional telecom business, that's not Dci as we typically would include that in the telecom segment has been going through inventory digestion and has been there for a while and we continue to see had been there, but our Dci and 400, ZR, particularly have been very strong over the last couple of quarters.

They have been very strong over the last couple of quarters in Colombia continued to be optimistic on that space. So I think again, the puts and takes there as traditional telecom still experiencing headwinds. And Datacom, which is again driven by the data. Data Center Dci is going strong for us.

In Colombia continued to be optimistic on that space. So I think again to put some things there as traditional telecom still experiencing headwinds.

But the Datacom, which is again driven by.

And Datacom, which is again driven by the data. Data Center Dci is going strong for us.

Data Center Dci is going strong for us.

Got it and just quickly on the number of about 10, plus 10% customers you had.

Got it. And just quickly on the number of 10% customers you have or near 10% customers, any new 10% or near 10% customers? We are disclosing our 10% customers in our 10-K at the end of the year. So obviously you have disclosed within in August. That time we had 4 10% customers but we are not disclosing that during the quarter so you will have to wait for another couple of quarters to see if any change is there.

Dave Kang: Got it. And just quickly on the number of 10% customers you have or near 10% customers, any new 10% or near 10% customers?

Quickly on the number of a 10 plus 10% customers you had. Or near 10% customers and you can per cent or near 10% customers. We are disclosing our 10% customers in our 10-K at the end of the year. So obviously you have disclosed within in August. Obviously, you had 410% customers. We are not disclosing that during the quarter. So you will have to wait for another. A couple of quarters to see if any changes there.

Or near 10% customers or any new.

Or near 10% customers and you can per cent or near 10% customers. We are disclosing our 10% customers in our 10-K at the end of the year. So obviously you have disclosed within in August. Obviously, you had 410% customers. We are not disclosing that during the quarter. So you will have to wait for another. A couple of quarters to see if any changes there.

10% of our near 10% customers.

Csaba Sverha: We are disclosing our 10% customers in our 10-K at the end of the year. So obviously you have disclosed within in August. That time we had 4 10% customers but we are not disclosing that during the quarter so you will have to wait for another couple of quarters to see if any change is there.

Disclosing our 10% customers in our 10-K at the end of the year. So obviously you have disclosed in August.

We are disclosing our 10% customers in our 10-K at the end of the year. So obviously you have disclosed within in August. Obviously, you had 410% customers. We are not disclosing that during the quarter. So you will have to wait for another. A couple of quarters to see if any changes there.

Obviously, you had the 410% customers, but we are not disclosing this during the quarter. So you will have to wait for another.

Obviously, you had 410% customers. We are not disclosing that during the quarter. So you will have to wait for another. A couple of quarters to see if any changes there.

We are not disclosing that during the quarter. So you will have to wait for another. A couple of quarters to see if any changes there.

A couple of quarters to see if any changes there.

Got it thank you.

Dave Kang: Got it. Thank you.

Hello.

Operator: Thank you. I am showing no further questions and I would like to hand the conference back over to Seamus Grady for any closing remarks.

Thank you.

I'm showing no further questions and I would like to hand, the conference back over to Seamus Grady for any closing remarks.

Operator: I am showing no further questions and I would like to hand, the conference back over to Seamus Grady for any closing remarks.

Thank you. Thank you for joining our call today, we're very pleased with our first quarter performance, including record revenue net income and free cash flow, we're optimistic about the longer term drivers of our business and our ability to continue to execute well to produce strong results. We look forward to speaking with you again and thank those of you participating in the Needham virtual call.

Seamus Grady: Thank you. Thank you for joining our call today. We're very pleased with our first quarter performance, including record revenue, net income, and free cash flow. We're optimistic about the longer term drivers of our business and our ability to continue to execute well to produce strong results. We look forward to speaking with you again and thank those of you participating in the Needham Virtual Conference next week. Thank you and goodbye.

Next week, Thank you and goodbye.

France next week, Thank you and goodbye.

This concludes today's conference call. Thank you for participating you may now disconnect.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Q1 2024 Fabrinet Earnings Call

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