FN - Earnings call transcript Q1 2020

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Operator

Good day, ladies and gentlemen and welcome to Fabrinet's Financial Results Conference Call for the First Quarter of Fiscal Year 2020. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions on how to participate will be given 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 Toomajanian, Investor Relations. begin. may you Sir,

Garo Toomajanian

year and today's everyone. Fabrinet's conference for of operating operator, XXXX. September joining financial you us results fiscal quarter first on call the which good you, ended Thank XX, afternoon, for and XXXX, Thank to discuss

Ng, the webcast TS investor.fabrinet.com. and the will available to Financial me a Officer; and on Grady, Investors Executive call our which website including to investor information, press on our refer at today replay Please call With Officer. website section Seamus GAAP This are our Chief important and presentation, Chief being located non-GAAP include earnings of is be reconciliation. for our release

performance like today's you that to forward-looking discussion would statements remind the future of company. contain I financial will about the

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

a our For in SEC risk of XX-K Form the affect that August in XXXX. filed particular factors captioned our recent section risk filings refer please on description our results, may XX, the to factors

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

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

Seamus Grady

results optimistic revenue second are that everyone. of serve good to earnings to afternoon, quarter. that we're the a with most stabilizing appear strong quarter the delivered strong Demand positioned in markets and the We Garo, you, Thank we we deliver above and be our trends and in in first end were guidance. performance

net quarter quarter. a million, to first record income XX% the quarter end was decrease share expected, in the as per Non-GAAP a high was margins of X% with Revenue as slight exceeding gross year the a ago. guidance improved from in $X.XX the $XXX from increase fourth

communications Within total optical million quarter up to we of from revenue optical revenue revenue. quarter of $XXX telecom end $X notable revenue million communications our in at XX% fourth at markets, the X% revenue. This about was optical $XXX be XX% best. Looking by business from increased telecom of million considering represented represented growth this particularly flat QX. had we momentum expected to Further, the fourth is expect continue of and and

revenue. million in decrease $XX was the is from represented quarter, Datacom primarily decline not due this industry revenue expected execution and of issues. XX%. result Datacom or communications competitive QX trends an We the XX% to of of believe optical broader

demand, be bottom In on trends flat fact near-term datacom based anticipated could be roughly we revenue expect we to the QX. believe in datacom and nearing

Revenue the By $XX optical photonics from was QSFPXX revenue. technology, based to down million XX% quarter optical from decreased fourth communications communications transceivers represented of and million silicon from QSFPXX and slightly $XX revenue quarter. fourth

optical rate, $XXX the to $XX up continued of data revenue of represent of communications products gig were nearly programs half fourth communications' XXX-gig strongly speeds at revenue. million, or million. By And XXX above from of rated quarter XX% and optical at

million Looking moderated communications in as from non-optical to at expected million our $XX QX. sequentially business, revenue $XXX

flat trends laser anticipated revenue was so and to QX. be quarter in compared from $XX As lasers from persisting million same These anticipated industrial million the industrial QX. we revenue $XX declined demand in to fourth to seem roughly be

million million stable in that laser potential the at were sensor manufacturers the respectively. this better term, to $X.X and further as to revenue optical about communications fact outsourcing Automotive industrial turn market market inevitably is penetrate compete global our market. than larger optimistic Longer and remain we in more both $XX to

our a great offshore other million volume from West business for mainly $XX grew Fabrinet has to for revenue West. non-optical Fabrinet sites. applications Finally, manufacturing sequentially been from winning generated XX% success

an have migrate us time. Fabrinet in Thailand. has early We Fabrinet At to have to might to been production in prototyping win customers new that gone and volume West the same numerous for seen in markets competitors. otherwise enabler new with programs from West business

we establishing customers Israel. a have West believe have there similar customers on number in ones. such, as our focused model As Fabrinet well attract grow business and been opportunity the a already with to we have we new of We these to as

It a is of We infrastructure for in new Ra'anana, a with a most manufacturing semiconductor which a for building have the already we introduction lease signed need is former equipped product center. facility.

a in We our to and failure up advance SMT Bangkok analysis are process to lines, in setting we similar facilities. of lab packaging what have currently the NPI support

hired have up we and and running to are Israel Manager be General year. next We targeting a early for Fabrinet

we trends to datacom telecom to are and strength believe guidance continue be start bottoming. that to fiscal our will with within optimistic the meet revenue off gross year the earnings summary, a appear In and ranges return We're margins our target we good range. that our to and that were

addition, Combined continued complex Fabrinet a for our In facility the products, are our we leadership excited very achieved future. important Israel. with product at to a milestones as we're establishing introduction most new toward excited have manufacturer about second contract

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

TS Ng

QX, market afternoon more results by QX for end everyone. good details and and year financial as well provide I with Seamus, will on XXXX. our our you for as for our performance guidance fiscal you, Thank

end million. above the fiscal $XXX.X range. net quarter foreign a accounted on swap for rate guidance million was per per the loss $X.X year our $X.X and interest guidance range $X.XX XXXX These mark-to-market share of share. approximately of in upper Non-GAAP contracts was after income revenue was $X.XX above first losses million of the of also exchange headwind our and Total and even

quarter GAAP our find details investor is the which to to as We more presentation, fourth offset A of website. in than to first in of non-GAAP release gross impact pleased on turning the Now press XX%, the a earnings merit increase the point you margin measures included basis reconciliation improve of our were efficiency to P&L. and quarter increases. XX can non-GAAP from our see

million was the first in $XX.X expense Non-GAAP quarter. operating

non-GAAP operating income As quarter. and with million the was margin non-GAAP operating X.X% flat a $XX.X fourth result was

Taxes in rate and $X.X the tax X%. our normalized effective less was million were quarter than

to quarter, share and earlier. amortizations I X% guidance expect share-based end tax net debt was income On for the issuing a full of income million, diluted compensation $XX.X our above to our basis, the $XX.X first X% which expenses GAAP per high per million for of our $X.XX or effective also year. guidance. $X.XX costs indicated quarter includes at be rate above first range the We share Non-GAAP diluted in net the was as or

to of compared was million and of sheet quarter, the investments statement. cash, $XXX.X the the Turning $X.X restricted At the $XXX.X of million and was the of flow end an balance fourth and CapEx the at first Operating million million free were to cash flow quarter. cash quarter. quarter with $X.X cash the in in cash end $X.X million, flow first outflow

During quarter and consume working higher new collect program level than capital receivables. to second increased to start the support will we in our the normal the to transfer transfer. self-correct begin as inventory quarter, in This of major

first We quarter. did not shares the any during repurchase

like market will such continue second evaluate for million we to share to As quarter shares XXXX. $XX.X of repurchase program in the remains guidance when to turn and opportunistically condition year would fiscal to our possible. our repurchase now I

improvements expect incremental we EPS described, of quarter continue second million a of a efficiency $X.XX per net million Seamus revenue per and range perspective, optimistic $XX.X GAAP diluted As in see and gross approximately to an quarter be From in within share second target XX% be net $XXX will to of will outstanding. From $X.XX we drive income anticipate $X.XX in based we to between share margin XX.X%. shares fully that perspective, strong and non-GAAP our $X.XX we are to anticipate range million. the income $XXX to margin that on the non-GAAP

In questions. to with We Operator, long-term positive conclusion, our in are continued like remain quarter. leadership will strong about for now we the open our in the we prospects very marketplace. call for excited performance the

Operator

from line first of Marchetti Our question comes Stifel. Instructions] [Operator John the of

John Marchetti

Seamus. revenue in there very appreciate taking I in. some A transfer coming guidance program is first in my Thanks as was for next this much. any that there the off I one that of with quick if if quarter was well? associated And you question. curious quarter

Seamus Grady

from some Yes. transfer revenue We the had John. program. Hi,

in the you much may big but part burn large As cash, from our quarter we transfer some was appreciate quarter. that that of we cash have did we pretty did a our inventory And quarter. the notice back-end with then shipments it you loaded can and was part in early in revenue to the purchased that, like in due as the

have this some that into receivables we quarter. fell So

I this well. some be our the quarter. into have for continue know by guidance bit it ramped thought it the end by We're we we be ahead We And did will of a of think revenue schedule. quarter this we this be out of little mentioned So yes, QX. end largely will we the think previously largely and as quarter ramped, in will it we think quarter. in probably I

John Marchetti

you're this just inventory expect you production So that and of coming actually of the that quarter program end clear, not you shipping that of out by be just whatever will purchased? out be to your for

Seamus Grady

like finished purchase didn't was that. didn't any semi-finished We We anything inventory Yes. only goods we purchase. The or or raw goods material. purchase

up that in little revenue it we to quarter. bit our was that of more we and will this There's fully expected produced ramped everything So in a quarter product was stay quarter last be quarter. this this

John Marchetti

And gears. I switch then if can

new sequential existing there. mixed wondering if and significant can XXX pretty with if more and is customers some increase there you that in there. if activity the check talk is above demand-related a had You in about, speed I'm customer was

can steep XXX Just behind you give that's sort ramp, any of and that in color fairly above? us that

Seamus Grady

both I existing combination customers. that new and say, existing a from customers. of of revenue John It's majority came the would

on be from as customers. any majority volume increase will from gig nature, of can the XXX appreciate new customers the revenue came small So you in existing the but

John Marchetti

just feel about little bit you better the the make changed visibility Thanks better. getting little if over of a do quarter And you or What can, about very bit then lastly business guess I there? comments what's about curious And have your that? a much. sort so I datacom to last

Seamus Grady

No problem, John.

It out/flattened. has we bottomed said both was datacom I there. think down feel we think we as business, quarter last maybe like

As We last it's out quarter and point expected a down. datacom think probably flattening. it's think We low kind of we was this bottoming our revenue was think quarter.

forecast the will do still we're we a So I think We're we huge have based And But little is any our on our increases customers. would but orders business quite up. is I say. we and strong think datacom, feel that's I would telecom really bit think in we on business our say. from be exuberant, not guiding not datacom flat

We XX rolling weeks have typically about visibility.

visibility Thank some our we So get that's have pretty visibility customers based good you, John. -- so John. from on and we the that's

John Marchetti

it. you. Got Thank

Operator

you. Thank

the of Needham. Our next Alex line question Henderson from comes of

Your line is open.

Alex Henderson

You bit at over year get you Can assume XX% that has than it's full-year? anywhere fiscal some Obviously, full talked little guidance doesn't I a you're think cross full that year more near bit plus when that exceed like about moving little XX% year level the could and your to that you about for that. or this sound program achieve you've in be it this cadence the here revenues. to the be mark? it over of given But from XXXX that can point and of talk the It half, Berlin. for a in first would

Seamus Grady

like The combination Alex. the be we relation from was business made in of the the a Infinera Infinera Berlin. previously that XX% transfer which you we to existing total, that previous Yes, already customer plus have in if will comment as business

that XX% comment Infinera business in the not existing sure was there. if explain addition businesses to I'm So the so the to related disconnect helpful. may alone, the Berlin that's the Berlin not business

Alex Henderson

to it over I so time am at this assuming isn't Well or XX% it. that close still anywhere point in

that that still would gets put customer? it's the comment over that them to type a at of you point a as think stands. revenues XX% When driving the So do program where

Seamus Grady

end reported we we for at quarter. of the again us that on think customers just this run year. fiscal full put the the of year. ramped XX% end at -- by rate should the transfer We we'll think That again be Well the business

Alex Henderson

Right.

a So question if second could. I

to acceleration optical Can have seems DCO, commentary. what fairly shift several flattening the ACO at would you be to versus call you a significant that that? market there the On and transmission shift in talk offset a think you in exposure between the ROADMs market to what extent and to transmission and what I switching switching extent companies' can

TS Ng

they customer. this to we build they know flat. the the it's they And it's one still TS. to of short And pretty saying you So you ROADMs that essentially for go these believe earnings for is run, call Alex long the Again, if as term up. listen most -- going are in

we So ROADMs. basically, us to whatever only they have one because on say the applies customer

Alex Henderson

question couple visibility two you the really extent that to have three you share to on transmission transmission sustain your to Do the next and over you But between when the business Right. enough use what shifts do can was offset of those that segments? quarters.

Seamus Grady

do. I would say I think we

two, shift quarters the unfold they hope that should we quarters. to three able as -- that to really offset. the help visibility that us next that of capitalize space just that transmission, rolling number have as we have out. we and visibility. let's transport But of begins think on to over We few customers have between say I shift don't But a in be kind XX-week

in a have of number space. good We customers that

So capitalize on we able to be hope that. to

Alex Henderson

question last I'll One floor. then see the

so You your cost, critical we but that indicated longer in those of the are Has components constraints part that? sets. past that passive products no production were drag? of you absorbing ameliorated, availability some on supply some fairly components lack a other and still on experiencing low Or are quarters that's

Seamus Grady

Yes.

have and like us. go passive that constraint some back much every there's challenges seems at behind If It's plaguing always that or We we like with pretty you're if the ago something think ameliorate three I this start quarters that whole I that constraint think that ago maybe our to stage. I -- certain was supply quarter industry. abated to secure. this at that industry-wide always nothing abated course has months year supply and go seems there significance. overall charges chain think of ago, of of that to was kind just but team There's But there that's a here But stage. passive nine normal any business. have at

Alexander Henderson

much. Great. Thank very you

Seamus Grady

Alex. Thanks

Operator

you. Thank

Our next question JPMorgan. comes from Samik Chatterjee of

is Your line open.

Joe Cardoso

this for is Joe Samik Chatterjee. Cardoso Hi, on

So, for in on my the first dig question margin. to I wanted gross

you quarter for QX I guided from last think moderation to XQ.

so out changed has And initially just in figure guys guys when was what in there changed variance the first double-click you or what can if was quarter. what curious we reported what and the just you from I there guided and

TS Ng

Hi, this is TS.

increase see whole start we the prepared increase. efficiency the first For quarter we August for offset as Typically the more year. the my July in remarks, merit September than giving merit

points better than So, previous the that basis June resulted quarter. about quarter XX

then June quarter So, XX%. was to XX.X% and moving

just And moving forward, backward showed it the QX, XX%. we don't from guide gross margin. based But improvement if look you guidance on

we happy So, continue are to to we we'll back that. very XX.X% maintain range and are to XX% that the

Seamus Grady

Yes.

have efficiency down maybe really Let to cost add gross very good result a team. margin in our of from me lot and we control the QX, it's gains a tight just

an control Our internal our supply tight team, excellent the operations chain do under team costs keeping team, and efficiency really gains. our realizing job

cost efficiency containment. So, say it's and like I driven by mostly gains

Joe Cardoso

biggest while of relative continuation been for bit are it that And that or like seems the market you. of thank the around then headwinds market, -- not kind earnings improving. in to that the my impacting of guys you commentary of headwind market little customers then And have was call suggesting one of industrial a dropping your that laser actually if kind off second last suggested more question, your

it whatever can explain of and kind will trough you you what guys are there? December there? can improvement So, seeing to provide be you Are you after visibility expecting guys helpful. then in Or

Seamus Grady

a That probably industry be that's a Spending going seems fair competition right fierce. up. to I The through time is tough think tightening now. is assessment. Yes,

through So going that a industry pretty turbulent whole time. is

customers. of number a have We

in our customer four shape our right probably being so space customers, bigger immune And one market that size and with one. now; going in that have we're on happening what's with what's from our of customers customers. is not really function our We a

in the quite term we that pressure remain space do So, market if Western quite it's big We The are price my say. because that you flat. remarks. optimistic like that do world companies some Longer the pretty might flat prepared I I think market have that laser the the as optimistic feeling. mentioned we pretty remain about of is companies would in laser

will extent as will pressure outsource a lot more and they of the to and to way believe turn We that space, heavily a more because offset much. outsource a to that in quite outsourcing large insource companies they don't they that

we customers So, as of flat industry the well-positioned we we're short-term pretty have. indicated. think We capitalize as have with is to capabilities our we're very and I'd experience overall to looks outsourcing. some that kind of well-positioned demand, But say think

Joe Cardoso

And guys. Thanks results. on right. congrats All the

Seamus Grady

you. Thank

TS Ng

Thank you.

Operator

The Instructions] Tim Capital of line Savageaux of [Operator you. comes Thank the from Markets. question next Northland

line open. is Your

Tim Savageaux

good Hi, results. the afternoon on and congrats

Seamus Grady

Tim. Thanks

Tim Savageaux

First customer the customer question XX% do of the is customers quarter? your on traditional any XX% customer outside in large have side, you

Seamus Grady

said, one as the at who We for full at year, XX% year. we yeah. we early we're a tracking think -- but But we probably too become or a to the be another two there's certainly a the Well, year, There's that could customer. Infinera two chance end will customers the stage. probably only likely of flagging by this mentioned start XX% XX% the we've reported customer we'll feel end it's of have

Tim Savageaux

of business you or customer contribution mostly ramp existing both customers. new that versus your results of And either outlook from on silicon at customers? strongly with But the existing the I in or growth your commentary growth And sequential X% existing that. that in the in context the guess context new the telecom can in quarter, in programs that context characterize line growth if you looking telecom. your I so mentioned on XXX photonics pretty I've reasonably. also Appreciate the can sequential Okay. especially then down growing gig from characterize things or the wonder and

Seamus Grady

that of from growth A Yeah. silicon customers, customer. then lot those predominantly come related. a silicon new did photonics our is datacom of decline growth the lot actually in our photonics, is our telecom come from in the existing And new big some portion in customer. the is did telecom-related, of an quarter, of some from XXX-gig business but

telecom are in a silicon suppose silicon mostly that decline the two sense the decline in the overall, growth possible is customers. photonics I for the in photonics a So the datacom and

Tim Savageaux

don't any anecdotal guide -- continuing. forward expect you have but around kind have you right. telecom you look if as you you as return commentary Understood. head similar that realizing of throughout to segments, what thoughts specific that into to next you All quarter photonics And by these I any you point? year? any the Do expect wonder of growth at some out silicon to Do the and growth

Seamus Grady

But quarter flat quite a that hear we again and photonics at is a we be will Silicon a and with bit a I datacom have customers our we to so telecom the strong the also only our telecom does think And silicon think guide that photonics, centers think strong. continue of the side sentiment lot several overall on we the I that think. a of to experienced data of will affect going overall -- the one two think be in flat or customers is softness there on on datacom we think bit of us side. time. and little remain I side, out it's the But little

Tim Savageaux

Great. on. much. I’ll Thanks very pass it

Seamus Grady

you, Tim. Thank

Operator

you. Thank

of Alex Henderson from Needham. Our next question comes

open. is line Your

Alex Henderson

hoping us was the could give you geographic split? I Thanks.

TS Ng

the XX%. In between changes. China, rest shy are of split terms the of the North more of no America world. shipments, rest And

also a is Southeast We to portion. country. ship Asia a big bit quite Southeast Asia

Alex Henderson

I'm your said into my the in in you sequentially forward got tell sure it for can fourth telecom notes. FY And about again? growth -- I was XQ, not the expectation growth going What what CY XQ? telecom right you me

Seamus Grady

think we that around haven't strong. forward. haven't our we we will guided The our we in specific guidance overall telecom do We remain, more will sentiment Well, given the guess quite I but for for think telecom we is specific growth any flat telecom revenue Datacom hear customers was quarter. discussion really from is next sentiment.

Alex Henderson

nine more question some be one I far that revenues out? to Around Is could. Israel Or months take? does when the operation And how to see. facility? you if expect six, I actually generate able that from would out that

Seamus Grady

part now. be we'll I bit rock think the March time so and of of be the bit June say should -- expect revenue time think business be but extent kind and January there year, I we're June the, to takes to to little from ready certain next quarter, when to it We some to quarter. roll in so but would it then do running business. a frame, the the in that's a we'll in little business, grows targeting to up we're be the maybe would I But contributing the see and emanating ready in thinking what earlier of to a early right

fitting the fortunate we're because infrastructure, manufacturing and in the it we're So building right a got facilities was has now of has originally. lot already out that place. the of we It lot infrastructure facility a building a the semiconductor

the shortens customers very full SMT to planning for time the packaging us. failure and optical that And our of we're equipment suite there. So analysis install equipment, capability for full importantly equipment, line

have same of all capabilities in that smaller Bangkok replicate we'll set on we scale, a So actually. these the

Alex Henderson

roughly facility being sized Do comparable as that West? you see to Fabrinet

Seamus Grady

It's a facility. smaller

West square probably location The a itself it what need. it's a The we of smaller. it's than is little terms footage would a actually facility great great facility. building In Fabrinet bigger bit

facility. smaller a it's So

footage of I square terms think about... it's

TS Ng

XX,XXX.

Seamus Grady

square XX,XXX Roughly feet.

then it's Fabrinet ideal main So actually of a size that revenue itself. purpose Fabrinet going to be The be customers And huge we to Bangkok. similar we Israel not in for of to will transfer to need. and win it's an generator what West,

and Fabrinet the we'll Israel. try we've West had in in success replicate So

Alex Henderson

of on your us on you you might you update to moving sense start going us any I factory your give in see. Can facilities on in utilization that? an Can next give need what's the when of facility? terms

Seamus Grady

Yes.

probably and Chonburi. and in campus been space really additional new up ourselves Alex in we've we hard to how So surprised we've to gaining Pinehurst It's successful. very Pinehurst. win in freeing at create successful been at our We efficiencies because continue say business main space

Pinehurst Pinehurst we're Chonburi. facility the our business new revenue footprint. our We're growing our on same adding So into

put in we'll It's we'll the but to lands when point hurrying to will -- hard be everything it say way really be pipeline this at ready if not up have this land. we I'll everything

So for I think would the Chonburi. still we're grow very say, optimistic about need to us I

And quite really quickly. that. being date to like I I put just it have be we'll growth say But customers. pipeline going because to newer we a it's not will of everything the our get more in very it's if say whereas hard it's be a the lands, for hard Chonburi have on Pinehurst the customers to put with a lot on existing I'm like date in will evasive

Alex Henderson

One whether gig? I on telco correct? if that like whether talk many Is bit XXX you in right. that's question that XXX don't since gig for sounds that's mix have All about XXX last product the the little it too telco. or XXX-gig I side you could that's a can within commentary, assume The gig queue. mostly

Seamus Grady

mixture a of It's XXX.

Alex Henderson

Datacom? In

Seamus Grady

mostly XXX Yes, yes yes. gig,

Alex Henderson

gig In telecom about datacom on that's XXX side? the what but

Seamus Grady

be telecom the side will XXX gig. yes, On that

TS Ng

gig, yes. XXX Majority

terabytes quoted. that number Excluding X.X that's the excluded Seamus XXX the from gig just

Alex Henderson

Thank you.

Seamus Grady

Alex. Thanks,

Operator

you. Thank

is question next Marchetti a John Our follow-up Stifel. from of

open. is line Your

John Marchetti

go opportunity of where quarters, And you a follow-up changed a type mostly actually a little seemed if of the like market site. it It last sort you I Thanks West, couple where what little everything. a Fabrinet of bit or revenue that seems Israel that bit on expected can just in it's if in very if departure from environment a a it'll of bit be similar going can Seamus, had -- changed this the much. mix is to kind you're little the that to or itself all the if little a of at the just there. the forward sense Curious, been move if found secondarily, to I be mix or bit even expectation that of after on this that comment something of trajectory backing business. in curious think to perceived non-optical you of just decided you I'm least about made an your at just that off there.

Seamus Grady

Good question.

Israel I need Israel. the I bring think on always was trajectory, the or looking up We just able for frankly we quite our so grow three say is existing us business be timing have customers four The really to been the our great hold being to on the find to bullish a there. their location we'll service up facility needs we've right would on think there, also John location. in and

we idea. we've to very and supportive So spoken they're the customers them the have, of

ideal you Our hold let's up if in it's government that be like the build incentives, incentives of just There's would a say, not was lot literally finding right for locations us. location. to

and Israel. middle -- at We're is if look Valley. in same the in right in you important the what very Location we've it's done of Silicon Fabrinet West, we were

location the really finding location. find to done it right managed So that and was about just we've right we've the

communications moment for to companies. I just me a the existing mix, mean let are think optical As customers, our all

TS Ng

And mostly datacom.

Seamus Grady

Yes. And mostly datacom.

mostly Israeli Our all customers companies optical are communications existing datacom.

products, to business with grow precision and limiting that be of in are products companies ourselves we continue obviously non-communications LIDAR other companies applications. was spot our complex infrastructure technology it's other limiting other add sweet also not type high-technology communications complex optical, but companies, And to if just transferred you looking like to we So, but to to and those Thailand. that ourselves we're would are

John Marchetti

Seamus. Thanks, much very

Seamus Grady

John. Thanks,

Operator

you. Thank

Markets. Northland Tim follow-up question Capital a Savageaux We of have from

is line Your open.

Tim Savageaux

opportunities update of kind a wonder OEMs that is if the be of supply you in Thanks. kind quarter on wonder has far to is contributing customers chain. this on if that commentary back can moving what chains supply but you focus that give as and I guess. tailwind, passed, might on to you of what if out out. Wanted from extent I now Thanks. you give an can calls, type past your shifts kind pipeline, characterize In us of us another seeing China pretty to I an update of pipeline global

Seamus Grady

tailwind, a still but that's say move. slow would I still to -- that's So quite

earlier grow Some pipeline existing I but that, our a adding is new to of customers. and more customers function continuing referenced really the with of function both it's of a business also just that our

few some up a have system we're and up big, moving about the say us, would big full quite systems. full into We the excited the I really the food chain of opportunities network that for moving some opportunities of things in build are the pipeline

With system. that from experience network us transferred the with now that we have Berlin gives business, full

business other in some have same space. that We

positioned uniquely build of approaching kind full that from bottom like if you in system that we're we're think we So, from the goes the and the -- industry up. our

the complex high-technology components are chain to we makes the up within produce the goes so We think the the move system network that. food system, that it for full us in modules sense producing with most and

in what like large there part we I say, targeting exciting have that's some Tim. pretty And we're opportunities that So, pursuing. we're

Tim Savageaux

of that you optical there up could of follow optical the are your systems on as comment see I just If I networking -- universe or other In quickly. kind full up remains terms parts where opportunities? to focused moving transport imagine of in communications, on that the level

Seamus Grady

storage system to only a makes high-technology like the just into really optical It's producer if systems. a those in components become, equipment not content the not our or networking that. that goes large sweet us for when you producing and It for of like spot. infrastructure That's the mostly portion we're equipment general anything as sense you that like equipment. planning large said the We're

and for make it us. -- also So sense

content not make large for you we're but us mean. to produce systems, producing sense know any doesn't it I the what of if say, Let's

not So, ourselves see as we just as assembler. would an

the to high-technology most Therefore makes Does for a Tim? full technology as makes sense produce system. the components. producer us ourselves that industry's see complex and sense will We it of

Tim Savageaux

Sure, much. it does. very Thanks

Seamus Grady

you, Thank Tim.

Operator

Grady back time, At remarks. I'd turn this over the call any Sir? you. like closing Thank to Seamus for

Seamus Grady

Thank forward term. position longer you, you for call outlook all the operator. and positive Thank We're And soon. continued our again diversification goodbye. and to strong for speaking continue you a we results as Thank you look excited the and to today. over growth company deliver joining with to we

Operator

call. gentlemen, today's you and Ladies this concludes participating. conference for Thank

You may now disconnect.

Fabrinet (FN) 4 Nov 192020 Q1 Earnings call transcript