FN - Earnings call transcript Q2 2019

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Operator

Good day, ladies and gentlemen. Welcome to Fabrinet's Financial Results Conference Call for the Second Quarter of Fiscal 2019. At this time, all participants are in a listen-only mode. Later, we will conduct a question answer session and instructions on how to participate will be given at that time. And as a reminder, today's call is being recorded. to call like Garo your now Toomajanian. would turn for your host, I

Garo Toomajanian

and is and Officer. refer Thank to With on Chief financial our TS afternoon, us that today's you, on the Seamus our of good performance Thank include contain operator, and a Grady, remind which you including XXXX, the Investors forward-looking everyone. website This the for located release will be future second like financial conference Chief being ended which replay Ng, call available website to fiscal are year results GAAP information, section XX, to at to important press will webcast on call the and you presentation, of on company. of investor.fabrinet.com. discuss discussion Executive operating Fabrinet's XXXX. about call for non-GAAP Officer; and December the earnings Please Financial reconciliation. quarter me our today's joining investor statements for today would our I

and the obligation Forward-looking information of risks light or our that results as actual by opinions cause except statements from required and as new expectations. differ statements law. to materially only revise of to them could to management's presentation, reflect no uncertainties this current subject we of are undertake These date in future events,

our risk SEC of November description Form captioned the XXXX. on that refer our factors particular, filings, Factors in X, may results, the to filed a XX-Q For in our Risk affect please section

CEO, Grady. like over for remarks by to Seamus? questions. now from would We Seamus Seamus will Fabrinet's and time with call begin turn to the followed the I call TS,

Seamus Grady

was strong These also revenue earnings exceeded non-GAAP good $XXX the per income the share. We above at million at our posted share drove of and $XX quarter and with quarter operating and quarter. telecom growth by high-end results in cash flow eased Revenue you, flow the second of Upside the Garo, flows in experienced the million. afternoon, the driven our expected cash of guidance supply we million primarily $XX range everyone. second second in from $X.XX Thank quarter guidance cash somewhat first non-GAAP and second Component than markets. nearly was quarter. in net constraints per record also that the in free stronger

parts supply ASIC remain constrained. However, MLCC and for certain

As continue from in gross such, revenue. constraints see our some headwinds efforts customer and to meet mitigate these to we to margins demand drive supply to order

communications next-generation communications non-optical optical the our to sequentially product By Looking million, transitions. million, which revenue optical million grew decline design at record. optical and by percentage revenue of points and grew additional quarter. optical XXX Optical revenue $XX again were products a at current ROADMs. communications all-time revenue optical, XX% communications designs. communications QX, amplifiers as of was an optical such from decrease Growth of both to transition slight due silicon the well a to first from business as QX million of transceivers XX% or second to from or $XXX from products at due XX% in of X% end-markets, year-over-year. strong by primarily Datacom technology, non-speed generate primarily QX, few telecom products $XX photonics-based a products continued led grew growth $XXX the Within revenue quarter and to from performance XX% Gig as total was with rated was revenue

production photonics-based photonics perform up from faster from communications XXX than X% be the mentioned, both By dominate more revenue revenue Gig QSFPXX million. QSFPXX revenue optical million. optical continue represented or to at During XX% of Products above rates, rated from revenue virtually this of transceivers revenue QSFPXX data as customers of well I started and to communications XXX speeds of QSFPXX $XX from can and the two at data see non-silicon telecom started applications. and to QSFPXX programs quarter, the of at transceivers. migrating optical Gig QX XX% Variance to silicon we $XXX rates with now continue as with which all

non-optical communications, at up X% from revenue $XX million, Looking was QX.

quarter was momentum $X industrial with was stable automotive see million. growth business sequentially programs in total to traditional sequentially or quarter X% to second continue top-line and million existing new $XXX We revenue. non-optical new new remaining to in Sensor up at and laser our revenue in the million. and $XX to applications second revenue X% a markets million with the little. XX% also sequentially revenue contributed business automotive with million other $XX increased Automotive stable of $XX flat the revenue at communications X% up Both to up

partner terms QX performance and us second quarter demanding ample prospects our will the longer-term generate quarter our enthusiastic TS of continue and a in our occupied, existing of color as capacity on in third spoken near-term customers’ handle over profitability. XX% complex will in pleased We our In most about that record we new is to a strong little revenue new have record are provide from our guidance with summary, for or both and a products. and trusted demand. interest for to for customers while Chonburi but more we represent we building and are manufacturing optimistic remain

to quarter Now to let outlook. me discuss our details turn TS? the performance of second and the call our TS over

Toh-Seng Ng

per guidance $XXX.X our well foreign you and despite This $XXX $X.XX and in XXX million. exchange on our means $X.XX of range million of year of to year share in that was Note of per Non-GAAP we ASC that you, also $X approximately performance I guidance was million XXXX as million. of results Total share the net provide income income good impact end-markets fiscal XXX XXX fiscal financial to XXXX. above ASC our for adoptions by fiscal headwind $XXX quarter. more by the details our under everyone. quarter a Seamus, second Thank exceeded QX quarter the QX second revenue revenue and net revenue. million our was our was high-end will ASC immaterial. this on $XX guidance year our afternoon, with contributed for as

Looking the at communications optical of XX% in telecom more market driven our quarter represented primarily representing non-optical detail, second Optical growth of within was with by communication communications. the XX% revenue revenue.

continue presentation, P&L, our constraints having on to for turning range the still in our can in details margins. margin Now a our you impact a and first of is on find website. quarter which the included Non-GAAP certain see but was overall little from as to non-GAAP press bit to negative from GAAP supply components reconciliation measures we a investor earnings an release a gross low quarter, second XX.X%, the our improvement gross target on

the We was our Non-GAAP reaching in $X.X year. to year million from fiscal quarter operating of quarter, continue a the range XX% target ago. to anticipate this from first but expense basis down on XX.X% quarterly second a up

an X.X%. non-GAAP Taxes $X.X margin a from normalized and was year and $XX.X quarter. effective a quarter X.X% was was and first compared the the million, operating As the our first rate increase result, in to in operating was quarter income ago, million, X.X% tax non-GAAP

basis, quarter a Non-GAAP for continue also share-based the $X.XX year. up anticipate X% or rate net per year diluted We in record or for ago. to a second amortization record and share, the On a X% $X.XX $XX.X effective quarter $X.XX million from compensation a debt an of share, includes GAAP income $XX.X issuance and the performance. which expenses income $X.XX was per to was net the QX fiscal tax costs, million diluted of second in

to did $XX.X position from Operating sheet Turning million second free continue and quarter flow the our the cash $XXX.X in first second quarter. of repurchased conditions share $X.X the were million cash $XX.X quarter. and the the will cash in end investments the during cash the million We was each quarter. on cash Management flow evaluate not statements, any and buyback of quarter, of stock market programs to at and increase the based flow was million $XX.X second with an million, CapEx balance the quarter.

As guidance quarter of of the XXXX. quarter, our million end I like would in $XX.X now of such, for the authorization. to year fiscal third our repurchase to as the remain turn

reporting reflected and but by year-over-year Despite net revenue optimistic under ASC this market Datacom offset revenue and in position sequential from non-optical remain growth. with decline in XXX, with small in we XXX, ASC confident we revenue, guidance the seasonal reconciliation communications. decline this reporting based in and provide growth continued a a telecom, After in total as sequential now on will quarter total small very our is quarter, are decrease record anticipated the a decline in in third year-over-year results. income sequential and we growth, we our continued While in second third quarter anticipated small a

XX.X third the $XXX share million quarter outstanding. the in performance we million. income anticipate per fiscal of summary, anticipate record diluted to of on year to income revenue second the In of net we $X.XX range to third in $X.XX earnings and of per with GAAP $XXX XXXX, quarter. fully $X.XX pleased to quarter net non-GAAP our From million based range we perspective, $X.XX in in an share be to the For approximately shares the be are

the in would market Operator, business open Our to optimistic make questions. strong momentum. we our like us position now for call

Operator

Company. will question come Instructions] from Alex [Operator Henderson first Needham and And with our

open. now is line Your

Alex Henderson

couple thanks. just A quick of questions data. Hi, modeling the on

Should one year or up back year, $X.XX in to the for to we you at saying in you fact, X% is had X% X.X. an X% full the you expect like first well half to better in are – X% line X% annual below the been that numbers in to forecasted, the are that the basis, on guiding positive that what on X% quarterly The basis? expecting, we that looks we to a in a make tax are since relative modeling be we came to for the

Toh-Seng Ng

Alex, Hey, afternoon. Good is this TS.

quarter, particular tax the for little expense. a we think, I below thought $XXXk

to to would forward still in second X%. half, Moving the X%, X% go back I

Alex Henderson

X% on a not a then? basis, quarterly to basis X% it’s year on So, full

Toh-Seng Ng

That’s correct.

Alex Henderson

Good.

at one And a of then, or rightsizing was that I towards the this or line here and that quarter, $XXX,XXX we back was, Okay, give the what that and it Should is marketing in you seasonally be little lower stay that? thinking that some on so comes level? helps. range us decline can down stronger sales surprised a XX, the the XX.X will normally up other

Toh-Seng Ng

a the of quarter No, QX. last couple we in have adjustments

at still quarter. Moving forward, million around I per $XX look

Alex Henderson

the on quarter and per million marketing $XX line? sales

Toh-Seng Ng

Alex that’s Yes, correct

Alex Henderson

That’s non-GAAP?

Toh-Seng Ng

yes. non-GAAP, is It

Alex Henderson

Right.

Okay.

Toh-Seng Ng

And flat ASC XXX cost.

Alex Henderson

still has Right. were supplies Can that are what still what capacity said improved, tight, with? what me tell you you said you said, you you struggling some just chips

Seamus Grady

is Seamus. this Alex,

and MLCCs see devices. tightness two did or So, on but improvement MLCC ASICs in have couple name the still Overall, primarily, the being some an and them. certain quarter, we of a also ASIC we categories

Alex Henderson

it that that you – over the get XX% like back you given to are sounds the XX didn’t to So the about we better in March year, say quarter the range expecting quarter? or –that plus be hurdle March should below that XX but

Seamus Grady

at did to were we at prior – the think improved think of I QX, the I we’ve continue I XX.X% we year. the we some XX.X%, back before think in and I the from improvement we get to the mean, XX% we end the said see can quarter

be we light year Now it this can in QX there, there QX we would back in get fiscal that to in but components say QX, we whether on whether we or QX, component, the remains it’s headwind back there get still or certainly seen. I have think

Alex Henderson

but exchange one XXst levels last hedge has I rates assuming since that assuming the know Xx, been the in that up in you I’ll it What assuming I Xx but are it Okay, floor. exchange line? in Xx you Are or spike line. $X are for forecasting million, December million back February March in line? line hit a that does show we move, the operationally, and $X hate the question quarter on we to that cede in zero

Toh-Seng Ng

this for guidance, hedged. the this basically quarter, baht the for March I reason I the fully it all Alex, our we quarter have is for quarter. already and all assume is that, zero need

I U right is June turn have are we the and dollar quarter, right buy a quarter. average appreciating for June like again September cost baht, and to partially down moving Now, obviously, hedged now now to and

today, But THBXX. In baht you to probably headwind see assuming tomorrow are know don’t you gross morning. level the back it at might again. stays quarter, So margin some yet may this THBXX.X THBXX.X the this because we on September again it at be up

we very watching So, it are closely. very,

Alex Henderson

quarters? gross If I margins a would in June, current exchange assume your stays way this December the the level September, the rate through at that against all headwind be XXXX,

Toh-Seng Ng

in stay will We THBXX.X. the September more it be and – quarters at September, so June in December excuse me, assuming

Alex Henderson

numbers. assume currency a the we than have unless you. our content. harder for appreciate but your Thank flatter currency to Okay, I

Toh-Seng Ng

Alex. Thank you,

Seamus Grady

Thank you, Alex.

Operator

come Troy Thank line from our Jaffray. you. And Piper of question the will next Jensen with

Your line is open. now

Troy Jensen

Hey, results. congrats great the gentlemen, on

Seamus Grady

Troy. Thanks,

Troy Jensen

so, on about You Hey, how was photonics? it the down there. said first silicon slightly

if you transitions, think provide on of what mentioned product anything else happened? can some I details you on kind

Toh-Seng Ng

I think well. quarter, as you some mostly technology look are in very of rest The customers Last at longer-term customer. a transition group if our a doing one we from well. doing it’s photonics in silicon design on segment, see the the

Troy Jensen

is I category. you about sure pretty and I'm talk Cisco to customers, customers know – this of is like in about acquiring don’t how Okay, Luxtera but Luxtera one your

with silicon and discussions you help Have up So, the photonics? maybe on any had there? just size us intents their wrapping could opportunity Cisco you

Seamus Grady

we nothing I Cisco have deal So, closed of yet. the yet hasn’t those benefited that yes, that acquisition from a we far say it’s noted we is all And, that know and types have as historically customer as would consolidations.

So the be. think impact us, might early to what yet it’s I say for too

Troy Jensen

know year conversations more customers about saying, All update be to know I end kind of just last China tariffs multiple love then, would with opportunity, you get right, of out perfect. of that further the Seamus, but had an and these And serious? kind conversations you I a there assuming get are then, it

Seamus Grady

and like report long they I several so, with to still qualification a then I at with It the continue process primarily stage the that. and of Troy, case top to discussions conversations concrete point, discussion intervene you, think from tell yet. timeline nothing to it takes customers, have we it’s have long this there Yes, but month initial until the on the six can nine that the and as it. said, increasing takes – terms discussions a can discussion business the I at with time you best on remain time be

Troy Jensen

Yes, totally, Keep okay. the up understand. I work good gentlemen.

Toh-Seng Ng

you, Troy. Thank

Seamus Grady

Thank Troy. you,

Operator

come of [Operator Instructions] question will you. John from Thank the And Stifel. next our Marchetti with line

is line open. Your now

John Marchetti

of Seamus much. little in very weak to March. wanted it’s just a if talking spend Good I December Thanks around the afternoon. kind been business. weaker the Obviously, quarter, bit minute, on Datacom a again I about bouncing you could, are in being here it

from kind of expectations sort are trying you curious that terms Just some a as get if sense Just a pricing us climb business what or how through demand color of can a for to front? in you give XXXX? we of that seeing of either maybe your are business

Seamus Grady

customers competitive price are Yes, experiencing has transceivers to for and doing so, these marketplace. with our remains fairly our customers our tell, strictly intense with the I demand can Datacom components The been The for been best, strong. you pressure cost products work some we’ve in markets our the to right, reduce make components John. customers

pricing end-markets. pressure some I significant fairly So but the from the coming remains strong, volume, is demand there think the

typically are so impact in savings like to able our this with that it generate able we cost an revenue, we the just past quarter, our did we are share margins. customers, on to While preserve

the is – of not that So, pressure strong particular the again, across board. there But volume to decline Datacom the it’s isolated in and pretty terms price one demand the customer, in is intense. with is

positive a on we all straight flat from out continued be don’t lines a expect still basis go we product on point expect that revenue to which the line we revenue to trend. up year-over-year up addition, to there In and indicate the

John Marchetti

growth silicon areas of following up even go to occurs, of you perspective. – to things about as you and just year? that other in those then, QSFPXX trends some that you obviously areas and the this some think would photonics, the move through be the am expect mentioned, And on of to the I the drop-off pricing in And trying XX the I a just from some

Seamus Grady

it’s it’s think that’s to two QSFPXX, customers on I are and transition that Yes, above. XXX products Gig fair The assumption. and a

sometimes high in But working that it with product like are be and up. are line, little to have with we Gig transitions does XXX we a it’s means with in like especially fact catch time of bit volume from customer we takes on Gig to it with straight growth a that a it again, example, to maybe comes QSFPXX for they volume grow the that. most problem then, that straight But because current that the generation a quality products. for QSFPXX the bandwidth happy XXX additional that a have line, the say, won’t to live that product a you So, to a come when next-generation do that there

John Marchetti

Right, a on with think with obviously noise some, any just may with get your one the can I in is business, actually concern going if customers, chance discussions in had market. a I telecom about on that you at action of or strength maybe right. happen and early if have pullback smooth like here serving that that on may that then, China we things Huawei last that not that that for ultimately because the And And is occur. may on demand there that what anticipation not an things some just one that out, in there in of side, is or all all China some we a front there of overordering sort overordering have that that may customers chance

market they sort right in China customers curious Just of now? viewing how are your conversations that with

Seamus Grady

way – discuss our of it’s have it's into customers. the John, necessarily that would there and afraid, not they companies with us chance something don’t of on that chain that’s the a tell we any the and customers were with is something we’ve they visibility honestly, discussed I'm we our that just as in always overordering some Yes, not are customers, course, if that somewhere John, – supply

John Marchetti

Okay, thanks very much.

Seamus Grady

Thank you, John.

Operator

will you. Company. next with from come our and And Henderson the of Alex Needham Thank question line

now Your is open. line

Alex Henderson

surprising. so That’s

you? you that to in of So, out production merger location any occur, between that Oclaro benefit? are that other a that Do and How change Lumentum. that positioning? couple your shake to any you impacts Or hurt companies to cutbacks you? cutbacks think ask I line the would that serving How are those do does would relative wanted product you all you and if currently might questions relative favor suspect in

Seamus Grady

there customer. to historically guess outs, and what make be XX% our think of I shake say, too companies the building we’ve say, for be that now too terms perspective, any now for one is at very have early I from Again, it’s this early been think product – very need historically companies. roughly customer what in little to sense they we in optimistic we both really stage. early have historically are But Alex we that XX% say, customer, what in had year our overlap last our and in in it’s XXXX the to I products Lumentum really it’s product number impact for and fiscal both might is we to been made

Toh-Seng Ng

And then, Alex, this is TS.

We I will in learn to. the more dial to which tomorrow earnings call, Lumentum from intend

Alex Henderson

news before that Well, the morning is call. happen good the will call

open. before the So, morning

you bit. a a little Has is, seems change changed, of mean, but The commitments? like little the I new to of been is level there bit And plant? to XX% starting second pretty capacity I seen to wanted good, the - some at have rate footprint out the in that’s it any of slowdown question adoption talk about

Seamus Grady

say I No, wouldn’t so.

they moved the Pinehurst customers may and up in. majority all Pinehurst essentially of keep free existing space it, our then to is, as think the and manufacturing they the are the in existing closed out moves to Pinehurst way time-to-time, then gets and is think at from comes additional the the that new product move at facility maybe and our end about facility life of I and to – as line lined customers, customers Alex prefer

at as grow, which and we revenue which sell correlation still the to Chonburi we increase other occupancy necessarily we pace improve the pace overall want as have have the fast we company. there the between isn't in but at words, Chonburi we our So of in obviously, can, to to direct

Chonburi. very We for regards now of terms are getting to above, would and spoken we much our we I versus slightly and above occupied say, are believe targets, own in full internal as on XX% track right in

Alex Henderson

the original Well, your nicely that to that’s I where decision were. think actually do might When understand you actually make have on for build? the next starting of ahead you as a targets plant

Seamus Grady

to we've think kind XX% was to always said I utilization. of get

summer, We the in straightforward Chonburi, probably want to make towards are probably think We are to starting with next maybe the at our there. the some relatively we us. own of probably, I looking decisions it’s for building end on do land

building. We the details, have the specifications for

So we know have exactly what we built.

pretty but move think? quickly, towards do to the aiming TS, of what think are we I be summer probably the So you fair. would end

Toh-Seng Ng

we probably… Yes, are

Alex Henderson

any progress full-time a Okay. And, have in CFO you made position? finding guys retiring TS’s to replace,

Seamus Grady

We is full-time fully a CFO, much have engaged. TS very a

look. continuing are We to

are We seen not party. any particular

candidates, but that We to continue very to lot with are terms stage a permanent good about to continue ready of there the anybody at found this We’ll replacement. in search, haven’t search. – we we of is talk continue

Alex Henderson

to guess he But keep stay, we to but happy be my is TS as that… wants long will as

Seamus Grady

Absolutely.

Alex Henderson

long this agenda point. his not in at That’s

little grandfathered facilities with? talk at into for relative there side you optical and productions the to closures some the back about that going to Thailand moving the your a that? to come now a Is are that you Sanmina more second, is to of bit been those could numbers? Just where Or involved still from production customers

Seamus Grady

that’s ons. don’t in not that we – have direct a any close So, involvement

and customer up we really not conversation, going fully are say a it’s speed Obviously, between to let’s in Sanmina. on So what’s our there.

but handle benefited on terms don’t what’s we and finished transferring, of in it. exact have good status some of have that We the loss, a

Alex Henderson

integrated and that locations? those into facilities going are how those from be be two tightly on is I streets going Lumentum to – back assume down to be plant wound. how that thoughts the the the that forth plant your Any will you? in Is between to going it

Seamus Grady

facility Lumentum's and Our facility?

Alex Henderson

Yes.

Seamus Grady

Lumentum’s – of much Yes, I that come so. of products the from mean, some the very – the if you like, facility. and today source Yes, the components some we

our two very tightly and the with other. So works coupled close are very operations

Alex Henderson

And progress, progress, you I process question thought on where The lack could. if one are Israeli of Israel? last

Seamus Grady

we I because do very Alex. capabilities. to our three being being and in going announce sure customers right developing there, slow business and then committed right to Israel to efforts So, existing and quite the facility to or right we a own The continue either careful of have facility, terms to establishing say, are Israel. nothing would continue this place the through our work But are a to up aspects continue values time, is But with at further we progress of exploring on own three new location But and as our relationships NPI location aspects bringing a make in up acquisition and specific with an all about our see we facility customers making relationships great Greenfield in we it all in three. we the facility. bringing

Alex Henderson

quarters. I could, why mean, sales three the it granularity give I line? little that back could pretty that’s between G&A so decline what a question delta me One Okay. you more in the bounces TS, bit on big caused And a more much? if

Toh-Seng Ng

are we we we when the we going targets not. management to accrual end, typically year adjust meet the the kind for expect Alex, or bonus whether and Sure. approach of so,

of accrual. not if so some reverse meeting So the we target, will the are we

affect systems is vendor, the which get some one and thing number. on will we that certain So then, have the that IP so, again credit we

is so. So, when the we to pull I normalized expect, which million XX go it SG&A you about back

Alex Henderson

hit beat consensus? you even though your did not bonus did I am sorry, targets accrual say, company

Toh-Seng Ng

example, only we two margins as we now, and gross for behind year the us. have end – target approach quarters management have the and has then revenues we certain Yes, as a

goal, meet we We are forecast are payout. we a will going whether the have going to to

will we have only a So, accordingly. payout adjust we

get payout. did year, Just in last any management not

, June year, had write-back last the accrual at how major quarter we look you if the a we fourth accounting. and quarter, do on that’s So,

Alex Henderson

relative targets guidance when the disappointment have because the that high-end expectations? beat of would you bonus Surprisingly your is to spend of you

Toh-Seng Ng

guidance thing, pretty I will Board is tell what, is one cannot hard, go with another you our thing. you

Alex Henderson

much Okay. that’s that Thank you Well, interesting. for very context.

Toh-Seng Ng

you, Thank Alex.

Seamus Grady

Alex. Thanks,

Operator

our the And FBR. next from line Riley Dave with come you. of will B. Thank question King

Your now open. line is

Dave King

you. Thank afternoon. Good

was next macro we about that on the the what First, couple the how think laser with percentage forward uncertainties segment of the for that? quarters all revenue? And and of going all segment, should

Toh-Seng Ng

Okay, this is TS.

I think $XX say right, $XX the by about we XX%. of divided million, million yes about laser, it’s XXX, XX%

Seamus Grady

of then, forward, underserviced laser, us, for key think terms would And Dave, market the say, of would segment. the in just Seamus, laser which is a potential, in market I a market target say, going terms large this We quite in degree is it’s the very to I and that outsources today.

marketplace X%. that Industrial is – communications. half small, the it’s market or of optical in market billion we outsources, it in terms X% which the optical marketplace and About versus to laser outsources that’s low optical billion manufacturing, let’s about And a is outsourced. the much very communications say how communications $XX globally. of today it’s of of mid-single-digits is kind degree the think, So, $XX to in half

is big very we So having potential it future for see growth.

Dave King

Sure.

Seamus Grady

it’s complementary communication terms optical In the of have technology, the we in side. very to capabilities the

Dave King

that we should to about or about, dynamic customers more June? sequential should December to provide mean, how sort just share, it can you think on March be color second market Is to from some are of I think guys, coming the growth half? I so should guess, you we how some are is about fiscal So talked expecting still we that you customers here? gaining like the

Toh-Seng Ng

doing is weaknesses there on The segment rich early longer-term, obviously TSO the certain doing see that in big segments, well. basis, there because are definitely laser and right heard we every participating segment, other is quarter-to-quarter some on innings. is so is just medium-term, XX a the In Dave, well, variations, been pockets is growing, of again, we think, were into that what depending I some continuing semiconductor-related But the simply is market but you Micromachining okay, now. customers in have our right.

on growing depending the as most starting customers customers which especially are in lot demand. maybe suffice say so a So it at the our to to some say right, in decline to that field, one

the quite So are we success. optimistic about

Dave King

I telco, I definitely are ROADM And you the drivers. seeing in the strength the believe one wondering, it. is you that Got guess was

take So out you wondering if possible. this if of kind can segment

Toh-Seng Ng

they listen they sold some our earnings if call, Telecom, They ROADMs on the they customers' and out you are amplifier, to out. of say adding sold capacity.

our down from demand, So to obviously, our some of are, them. backlog cascade these

again, listen customers who telecom to So, in if just of are our it. those have you specializing most

we growth growth So, that year-over-year for sequential XX% quarter. and XX% have

we for provide continue the look the growth. telecom driver the for So, to out to

Dave King

Got it.

Okay, two? you on and of remind lastly Can and maybe us, overlap any first then, of mid-single-digit customer both just and type are those they between Finisar. all, II-VI

Toh-Seng Ng

they total our As of percent of revenues. today, both single-digit, are yes, single-digit

Seamus Grady

And not enough. mature

Toh-Seng Ng

Not years that to Finisar, lines module Yes, and Oclaro ago and II-VI PCB a mature we then because, for have laser. the with that and then for many enough. the we really then do say EDFA for always palm the us

So, is in overlap no really yes, there it.

Dave King

very Got much. it. All right. Thank you

Toh-Seng Ng

Dave. you, Thank

Seamus Grady

Thank you, Dave.

Operator

I further And showing am you. Thank questions. no

Grady, pleasure to my remarks. Chief for Mr. comments So hand Executive back closing to over it Seamus or is Officer the now, conference

Seamus Grady

you Thank call today. our joining for

and the Thank you, And again look you excited a are diversification results to growth we the over forward as for strong delivered speaking that position goodbye. and we and to outlook longer soon. term. We we positive with continued continue company

Operator

conference. program. your does our thank on Ladies today’s and conclude This you gentlemen, for participation

disconnect. wonderful have day. all You a may Everybody

Fabrinet (FN) 4 Feb 192019 Q2 Earnings call transcript