What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-08-19 compared with 2024-08-20 · 147 added, 194 removed, 1117 unchanged (23% of the section changed)

41 unchanged sentences

The management applies judgment in identifying and evaluating any terms and conditions when the Company has an enforceable right to payment.

For the fiscal year ended June 28, 2024, the Company’s revenue was $2,883.0 million.

For the fiscal year ended June 27, 2025, the Company’s revenue was $3.4 billion.

The principal considerations for our determination that performing procedures relating to revenue recognition, specifically the identification and evaluation of terms and conditions in contracts for the timing of revenue recognition, is a critical audit matter are that there was a significant amount of judgment exercised by management in identifying and evaluating terms and conditions in contracts that impact the timing of revenue recognition.

33 unchanged sentences

Current liabilities

Long-term borrowings, current portion, net $ — $ 12,156

Trade accounts payable 637,417 441,835

88 unchanged sentences

Share-based compensation — — 33,004 — — — 33,004

Customer warrant — — 4,109 — — — 4,109

Issuance of ordinary shares 144,690 1 ( 1 ) — — — —

14 unchanged sentences

Non-cash restructuring charges and other related costs — — 2,201

(Gain) loss on disposal and impairment of property, plant and equipment 62 ( 1,506 ) ( 101 )

(Gain) loss from sales and maturities of available-for-sale securities ( 1 ) 92 13

(Gain) loss on disposal of property, plant and equipment and intangibles ( 70 ) 62 ( 1,506 )

Amortization of discount (premium) of short-term investments ( 4,563 ) ( 3,399 ) 280

3 unchanged sentences

Share-based compensation 33,004 28,374 28,127

Deferred income tax 1,672 ( 3,484 ) ( 191 )

Customer warrant 4,109 — —

Deferred income tax expense (benefit) ( 5,726 ) 1,672 ( 3,484 )

Other non-cash expenses 131 310 724

5 unchanged sentences

Income tax payable 4,029 ( 1,960 ) 2,977

Accrued expenses 13,036 1,398 785

Other payables 11,522 30,959 ( 4,174 )

Severance liabilities 3,799 2,771 3,753

15 unchanged sentences

Net cash used in financing activities ( 147,008 ) ( 64,853 ) ( 80,984 )

Net increase (decrease) in cash, cash equivalents and restricted cash $ 178,542 $ 33,609 $ ( 104,231 )

Movement in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at the beginning of period $ 231,368 $ 198,365 $ 303,123

Increase (decrease) in cash, cash equivalents and restricted cash 178,542 33,609 ( 104,231 )

Effect of exchange rate on cash, cash equivalents and restricted cash 63 ( 606 ) ( 527 )

Net increase (decrease) in cash and cash equivalents $ ( 104,939 ) $ 178,542 $ 33,609

Movement in cash and cash equivalents

Cash and cash equivalents at the beginning of period $ 409,973 $ 231,368 $ 198,365

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

3 unchanged sentences

2024 June 30,

Cash, cash equivalents and restricted cash at the end of period $ 409,973 $ 231,368 $ 198,365

Increase (decrease) in cash and cash equivalents ( 104,939 ) 178,542 33,609

Effect of exchange rate on cash and cash equivalents 1,391 63 ( 606 )

Cash and cash equivalents at the end of period $ 306,425 $ 409,973 $ 231,368

Supplemental disclosures

5 unchanged sentences

Construction, software and equipment related payables $ 40,781 $ 14,380 $ 13,526

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sums to the total of the same amounts shown in the consolidated statements of cash flows:

(in thousands of U.

dollars) June 28,

2024 June 30,

2023 June 24,

Cash and cash equivalents $ 409,973 $ 231,368 $ 197,996

Restricted cash — — 369

Cash, cash equivalents and restricted cash $ 409,973 $ 231,368 $ 198,365

The accompanying notes are an integral part of these consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5 unchanged sentences

The “Company” refers to Fabrinet and its subsidiaries as a group.

The Company provides advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and sub-systems, industrial lasers, automotive components, medical devices, and sensors.

The Company provides advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and sub-systems, automotive components, industrial lasers, medical devices and sensors.

The Company offers a broad range of advanced optical and electro-mechanical capabilities across the entire manufacturing process, including process design and engineering, supply chain management, manufacturing, complex printed circuit board assembly, advanced packaging, integration, final assembly and testing.

The Company focuses primarily on the production of low-volume, high-mix products.

The Company is capable of producing a wide variety of high complexity products in any mix and any volume.

The principal subsidiaries of Fabrinet include Fabrinet Co., Ltd.

15 unchanged sentences

The Company’s reported financial position or results of operations may be materially different under different conditions or when using different estimates and assumptions, particularly with respect to significant accounting policies, which are discussed below.

Significant assumptions are used in accounting for share-based compensation, allowance for expected credit losses, income taxes, inventory obsolescence, goodwill and valuation of intangible assets related to business acquisition, among others.

Significant assumptions are used in accounting for share-based compensation, the fair value of warrant shares at grant date, allowance for expected credit losses, income taxes, and inventory obsolescence.

Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be different from these estimates.

14 unchanged sentences

Short-term investments

Management determines the appropriate classification of its investments at the time of purchase and re-evaluates the designations at each balance sheet date.

Management determines the appropriate classification of its investments at the time of purchase.

The maturities of the Company’s short-term investments generally range from three months to three years.

19 unchanged sentences

Contract assets are recognized in the consolidated balance sheets under other current assets and transferred to accounts receivable when rights to payment become unconditional.

The Company estimates expected credit losses for the

allowance for contract assets based upon its assessment of various factors, including historical experience, the age of the contract assets balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers.

The Company estimates expected credit losses for the allowance for contract assets based upon its assessment of various factors, including historical experience, the age of the

contract assets balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers.

The estimated credit loss allowance is recorded as selling, general and administrative expenses in the Company's consolidated statements of operations and comprehensive income.

46 unchanged sentences

Intangible assets are reviewed for impairment quarterly or more frequently whenever changes or circumstances indicate the carrying amount of related assets may not be recoverable.

Goodwill arising from acquisition is primarily attributable to the ability to expand future products and services and the assembled workforce.

Goodwill is reviewed annually for impairment or more frequently whenever circumstances indicate that the carrying amount of a reporting unit may exceed its fair value.

The impairment charge is based on that difference and is limited to the amount of goodwill allocated to that unit.

The Company conducts impairment testing for goodwill at the reporting unit level.

Reporting units may be operating segments as a whole, or an operation one level below an operating segment, referred to as a component.

The Company has determined that its reporting unit is Fabrinet UK.

The Company may initiate goodwill impairment testing by considering qualitative factors to determine whether it is more likely than not that a reportable unit carrying value is greater than its fair value.

If the Company’s qualitative assessment indicates it is more likely than not that the fair value of a reporting unit exceeds its carrying value, no further analysis is required and goodwill is not impaired.

Otherwise, the Company performs a quantitative goodwill impairment test to determine if goodwill is impaired.

The quantitative test compares the fair value of a reporting unit with its carrying amount, including goodwill.

If the fair value of the reportable segment exceeds the carrying value of the net assets associated with the segment, goodwill is not considered impaired.

If the carrying value of the net assets associated with the reportable segment exceeds the fair value of the segment, the Company recognizes an impairment loss in an amount equal to the excess, not to exceed the carrying value of the reportable segment’s goodwill.

The reporting unit’s carrying value used in an impairment test represents the assignment of various assets and liabilities, excluding certain corporate assets and liabilities, such as cash, investments, and debt.

Goodwill is not deductible for tax purposes.

Accordingly, if goodwill is impaired for financial reporting purposes, there is no impact on deferred taxes.

Treasury shares

21 unchanged sentences

The derivative assets and liabilities are measured at fair value and recognized on the consolidated balance sheets by offsetting the fair value amounts under master netting arrangements.

For presentation in consolidated balance sheets, the Company may choose not to separate a derivative into its current and non-current portion as follows:

For presentation in consolidated balance sheets, the Company may choose to separate a derivative into its current and non-current portion as follows:

• A derivative for which the fair value is a net liability is classified in total as current.

5 unchanged sentences

Derivatives designated and qualifying as hedges of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges which include foreign currency forward contracts and interest rate swap.

In a cash flow hedging relationship, the change in the fair value of the hedging derivative is initially

recorded in AOCI in the consolidated balance sheets, gain or loss on the derivative instrument is reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings.

In a cash flow hedging relationship, the change in the fair value of the hedging derivative is initially recorded in AOCI in the consolidated balance sheets, gain or loss on the derivative instrument is reclassified into earnings in the same period or periods during which the hedged forecasted transaction affects earnings.

The reclassified amounts are presented in the same income statement line item as the earnings effect of the hedged item.

30 unchanged sentences

Customers generally are obligated to purchase finished goods that the Company has manufactured according to their demand requirements.

Materials that are not consumed by customers within a specified period of time, or are no longer required due to a product’s cancellation or end-of-life, are typically designated as excess or obsolete inventory under the

Company’s contracts.

Once materials are designated as either excess or obsolete inventory, customers are typically required to purchase such inventory from the Company even if the customer has chosen to cancel production of the related products.

33 unchanged sentences

For restricted share units and performance share units, the fair values are based on the market value of our ordinary shares on the date of grant.

Customer Warrant

Warrants issued to customers are accounted for as equity instruments and measured in accordance with ASC 718, Compensation – Stock Compensation.

For awards granted to a customer which are not in exchange for distinct goods or services, the fair value of the awards earned based on service or performance conditions is recorded as a reduction of the transaction price, in accordance with ASC 606, Revenue from Contracts with Customers.

To determine the fair value of warrants in accordance with ASC 718, the Company uses the Black-Scholes option pricing model, based in part on assumptions for which management is required to use judgment.

Based on the fair value of the awards, the Company determines the amount of warrant expense based on the customer’s achievement of vesting conditions, which is recorded as a reduction of revenues on the consolidated statement of operations.

The dilutive impact of customer warrants is determined using the treasury stock method.

Employee contribution plan

6 unchanged sentences

Severance liabilities

Under labor protection laws applicable in Thailand and the Company’s subsidiary in Thailand’s employment policy, all employees of such subsidiary with more than 120 days of service are entitled to severance pay on forced termination or retrenchment or in the event that the employee reaches the retirement age of 55.

retrenchment or in the event that the employee reaches the retirement age of 55.

The entitlement to severance pay is determined according to an employee’s individual employment tenure with the Company and is subject to a maximum benefit of 400 days of salary unless otherwise agreed upon in an employee’s employment contract.

33 unchanged sentences

Adoption of New Accounting Standards

No new accounting standard was adopted during the year ended June 28, 2024.

New Accounting Standards—not yet adopted by the Company

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, “Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

This ASU will be effective for the Company in fiscal year 2025.

The Company is currently assessing the impact to its disclosures.

The Company adopted this standard with no impact on the Company's consolidated financial statements.

New Accounting Standards—not yet adopted by the Company

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740), Improvements to Income Tax Disclosures,” which requires more detailed income tax disclosures.

3 unchanged sentences

The Company is currently assessing the impact to its disclosures.

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses,” which requires additional notes to financial statements.

This ASU requires entities to include certain current disclosures in the same tabular format disclosure as the other disaggregation requirements in the amendments in this ASU.

This ASU is effective for all entities for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

This ASU is effective for the Company's annual periods beginning June 26, 2027, and interim periods beginning July 1, 2028, and will be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the ASU to determine its impact on the Company's disclosures.

Revenues from contracts with customers

Contract Assets and Liabilities

A contract asset is recognized when the Company has recognized revenues prior to an invoice for payment.

A contract asset is recognized when the Company has recognized revenues, but has not yet issued an invoice to its customer for payment.

Contract assets are recognized in the consolidated balance sheets under other current assets and transferred to accounts receivable when rights to payment become unconditional.

4 unchanged sentences

The contract liabilities balance is normally recognized as revenue within six months.

The following tables summarize the activity in the Company’s contract liabilities during the years ended June 28, 2024 and June 30, 2023:

The following tables summarize the activity in the Company’s contract liabilities during the years ended June 27, 2025, June 28, 2024, and June 30, 2023:

(in thousands) Contract

6 unchanged sentences

Balance as of June 28, 2024 7,846

Advance payment received during the year 23,640

Revenue recognized ( 17,019 )

Balance as of June 27, 2025 $ 14,467

Customer Warrant

For the year ended June 27, 2025, the Company recognized $ 4.1 million as a reduction to revenue on the consolidated statements of operations.

Revenue by Geographic Area and End Market

19 unchanged sentences

Asia-Pacific and others

1,049,730 341,025 101,058

Israel 993,001 1,049,730 341,025

India 323,600 269,304 325,478

Malaysia 117,929 162,599 212,286

China 65,497 73,094 55,201

Hong Kong 100,859 60,489 132,136

Thailand 57,367 47,339 58,850

China 56,365 65,497 73,094

Singapore 52,538 8,797 6,792

Japan 37,541 25,094 41,105

Malaysia 32,399 117,929 162,599

Others 2,941 1,876 2,431

2 unchanged sentences

Germany 43,889 42,817 54,732

Ireland 599 647 133,225

Others 81,686 53,903 51,948

2 unchanged sentences

(1) Others includes revenues from external customers based in our country of domicile, the Cayman Islands, which for each year presented is $ 0 .

(2) Due to increase in revenue from a significant customer.

The following table presents revenues by end market and product category.

17 unchanged sentences

The Company was not subject to tax in Thailand from July 2012 through June 2020 on income generated from the manufacture of products at its Pinehurst campus Building 6, and is not subject to tax in Thailand from July 2018 through June 2026 on income generated from the manufacture of products at its Chonburi campus.

After June 2020, 50 % of the Company's income generated from products manufactured at its Pinehurst campus Building 6 will be exempted from tax in Thailand through June 2025.

New preferential tax treatment is available to the Company for products manufactured at its Chonburi campus Building 9, where income generated will be tax exempt through 2031, capped at the Company’s actual investment amount.

Between June 2020 and June 2025, 50 % of the Company's income generated from products manufactured at its Pinehurst campus Building 6 was exempted from tax in Thailand.

Preferential tax treatment is available to the Company for products manufactured at its Chonburi campus Building 9, where income generated will be tax exempt through 2031, capped at the Company’s actual investment amount.

Such preferential tax treatment is contingent on various factors, including the export of our customers’ products out of Thailand and our agreement not to move our manufacturing facilities out of our current province in Thailand for at least 15 years from the date on which preferential tax treatment was granted.

33 unchanged sentences

Corporate income tax expense $ 22,653 $ 15,173 $ 12,183

(1) Income before income taxes was primarily generated from domestic operations in the Cayman Islands amounted to $ 306.0 million, $ 196.5 million and $ 171.0 million for the years ended June 28, 2024, June 30, 2023 and June 24, 2022, respectively.

(1) Income before income taxes from domestic operations in the Cayman Islands amounted to $ 263.0 million, $ 306.0 million and $ 196.5 million for the years ended June 27, 2025, June 28, 2024 and June 30, 2023, respectively.

(2) Income not subject to tax relates to income earned in the Cayman and Mauritius Islands and income subject to an investment promotion privilege in Thailand.

24 unchanged sentences

Additional 498

Reduction ( 1,608 )

Balance as of June 30, 2023 3,824

13 unchanged sentences

generated taxable income and was able to utilize loss carryforwards.

Management determined that it was more likely than not that future taxable income would be sufficient to allow utilization of the deferred tax assets.

Management determined that it was more likely than not that future taxable income would be sufficient to

allow utilization of the deferred tax assets.

Thus, a full valuation allowance of $ 1.6 million for the deferred tax assets was released as of June 30, 2023.

In fiscal year 2024, due to our cessation of operations in the U.K., management believe that

it will not generate sufficient taxable income to utilize the remaining deferred tax assets.

In fiscal year 2024, due to the planned closure of this entity, management believed that such subsidiary would not generate sufficient taxable income to utilize the remaining deferred tax assets.

Thus, a full valuation allowance of $ 1.0 million was recorded.

In fiscal year 2025, the remaining deferred tax assets and valuation allowance were written off after the application to dissolve the entity was filed in the U.K.

During fiscal year 2024, our subsidiary in Israel continued to generate net operating loss and management expected that such subsidiary would continue to have net operating losses in the foreseeable future;

1 unchanged sentence

Thus, a full valuation allowance of $ 2.7 million for the deferred tax assets was set up as of the end of fiscal year 2024.

Full valuation allowance continued to be recorded in fiscal year 2025.

Income tax liabilities have not been established for withholding tax and other taxes that would be payable on the unremitted earnings in Thailand, which are permanently reinvested.

1 unchanged sentence

Unrecognized deferred tax liabilities for such unremitted earnings were $ 16.9 million and $ 11.6 million as of June 27, 2025 and June 28, 2024, respectively.

Deferred tax liabilities of $ 1.5 million and $ 1.9 million have been established for withholding tax on the unremitted earnings in China for the years ended June 28, 2024 and June 30, 2023, respectively, which are included in non-current deferred tax liability in the consolidated balance sheets.

Deferred tax liabilities of $ 1.5 million have been established for withholding tax on the unremitted earnings in China for the years ended June 27, 2025 and June 28, 2024, which are included in non-current deferred tax liability in the consolidated balance sheets.

Uncertain income tax positions

2 unchanged sentences

The Company recorded interest and penalties of $ 0.2 million and $ 0.1 million for the years ended June 28, 2024 and June 30, 2023, respectively, in the consolidated statements of operations and comprehensive income.

The amount of interest and penalties reversed in fiscal 2024 provision for income taxes is $ 0.2 million.

The amount of interest and penalties reversed in fiscal 2025 provision for income taxes is de minimis .

With regard to the Thailand jurisdiction, tax years 2019 through 2023 remain open to examination by the local authorities.

The following table indicates the changes to the Company’s uncertain income tax positions for the years ended June 28, 2024, June 30, 2023 and June 24, 2022, excluding interest and penalties, were as follows:

The changes to the Company’s uncertain income tax positions for the years ended June 27, 2025, June 28, 2024 and June 30, 2023, excluding interest and penalties, were as follows:

(in thousands) June 27,

16 unchanged sentences

Incremental shares arising from the assumed exercise of share options and vesting of restricted share units and performance share units 241 318 340

Incremental shares arising from the assumed vesting of customer warrant 9 — —

Weighted-average number of ordinary shares for diluted earnings per ordinary share 36,267 36,564 36,855

6 unchanged sentences

(Loss) Cash and

Equivalents Marketable

Securities Other

Equivalents Short-term Investments Other

As of June 27, 2025

9 unchanged sentences

Cash equivalents 35 — 35 — —

Liquidity funds 41,104 — — — 41,104

Certificate of deposits 64,278 329 — 64,607 —

Certificate of deposit and time deposits 134,288 ( 5 ) — 134,283 —

Corporate debt securities 137,695 ( 932 ) — 136,763 —

6 unchanged sentences

As of June 28, 2024, the Company had investments in certificates of deposit of $ 83.8 million and term deposit of $ 50.5 million.

As of June 27, 2025 and June 28, 2024, the Company did not have any held-to-maturity debt securities.

As of June 27, 2025 and June 28, 2024, 81 % and 74 %, respectively, of our cash and cash equivalents were held by the Parent Company.

The following table summarizes the cost and estimated fair value of short-term investments classified as available-for-sale securities based on stated effective maturities as of June 28, 2024 and June 30, 2023:

The following table summarizes the cost and estimated fair value of debt securities classified as available-for-sale securities based on stated effective maturities as of June 27, 2025 and June 28, 2024:

June 27, 2025 June 28, 2024

5 unchanged sentences

Total $ 619,101 $ 627,819 $ 449,807 $ 448,630

During the year ended June 28, 2024, the Company recognized a de minimis gain from sales of available-for-sale debt securities in interest income in the consolidated statements of operations and comprehensive income.

During the year ended June 30, 2023, the Company recognized a realized loss of $ 0.1 million from sales of available-for-sale debt securities in interest income in the consolidated statements of operations and comprehensive income.

As of June 27, 2025 and June 28, 2024, the Company considered the decline in market value of its available-for-sale debt securities by using the AFS debt security impairment model.

28 unchanged sentences

Derivative liabilities - current portion $ — $ ( 105 ) (2)

Total $ — $ ( 2,244 ) (2)

$ — $ ( 105 )

Total $ — $ ( 105 ) $ — $ ( 105 )

Fair Value Measurements at Reporting Date

2 unchanged sentences

Cash equivalents $ — $ 35 $ — $ 35

Liquidity funds — 41,104 — 41,104

Certificates of deposit and time deposits — 134,283 — 134,283

5 unchanged sentences

Derivative liabilities - current portion $ — $ ( 2,244 ) (4)

Total $ — $ ( 5,236 ) (4)

$ — $ ( 2,244 )

(1) Foreign currency forward contracts with an aggregate notional amount of $ 8.0 million.

Total $ — $ ( 2,244 ) $ — $ ( 2,244 )

(1) Foreign currency forward contracts with an aggregate notional amount of $ 130.0 million and 0.5 million Canadian dollars.

(3) Foreign currency forward contracts with an aggregate notional amount of $ 3.0 million and 0.2 million Canadian dollars and interest rate swap agreement with notional amount of $ 60.9 million.

(2) Foreign currency forward contracts with an aggregate notional amount of $ 35.0 million.

(3) Foreign currency forward contracts with an aggregate notional amount of $ 8.0 million.

(4) Foreign currency forward contracts with an aggregate notional amount of $ 127.0 million and 0.4 million Canadian dollars.

Derivative Financial Instruments

18 unchanged sentences

As of June 27, 2025, the Company had 165 outstanding U.S.

dollar foreign currency forward contracts against Thai baht with an aggregate notional amount of $ 135.0 million and with maturity dates ranging from July 2024 through January 2025, and one foreign currency contract with a notional amount of 0.4 million Canadian dollars and with a maturity date in September 2024.

dollar foreign currency forward contracts against Thai baht with an aggregate notional amount of $ 165.0 million and with maturity dates ranging from July 2025 through December 2025, and one foreign currency contract with a notional amount of 0.5 million Canadian dollars and with a maturity date in September 2025.

As of June 28, 2024, the Company had 135 outstanding U.S.

1 unchanged sentence

As of June 27, 2025, the hedging relationship over foreign currency forward contracts which were designated for hedge accounting had been tested to be highly effective based on the performance of retrospective and prospective regression testing.

As of June 28, 2024, the amount in AOCI that is expected to be reclassified into earnings within 12 months as loss was $ 1.2 million.

As of June 27, 2025, the amount in AOCI that is expected to be reclassified into earnings within 12 months as gain was $ 1.5 million.

During the year ended June 27, 2025 and June 28, 2024, the Company included an unrealized gain of $ 1.9 million and $ 0.7 million, respectively, from changes in fair value of foreign currency forward and option contracts which were not designated for hedge accounting in earnings as foreign exchange gain (loss), net in the consolidated statements of operations and comprehensive income.

Interest Rate Swap Agreements

The Company entered into interest rate swap agreements to mitigate interest rate risk and improve the interest rate profile of the Company’s debt obligations.

As of June 28, 2024, the Company had no outstanding interest rate swap agreements and as of June 30, 2023, the Company had one outstanding interest rate swap agreement with a notional amount of $ 60.9 million.

On July 25, 2018, Fabrinet Thailand entered into an interest rate swap agreement to effectively convert the floating interest rate of the term loan under the Company's previous syndicated senior credit facility agreement to a fixed interest rate of 2.86 % per annum through the scheduled maturity of the term loan in June 2023 (see Note 13).

The Company did not designate this interest rate swap for hedge accounting.

On September 3, 2019, Fabrinet Thailand entered into a term loan agreement under a credit facility agreement with Bank of Ayudhya Public Company Limited, and on September 10, 2019, the Company repaid in full the outstanding term loan under the Company's previous syndicated senior credit facility agreement (see Note 13) In conjunction with the funding of the new term loan, the Company entered into a second interest rate swap agreement.

The combination of both of these interest rate swaps effectively converts the floating interest rate of the Company’s term loan with Bank of Ayudhya Public Company Limited to a fixed interest rate of 4.36 % per annum through the maturity of the term loan in June 2024.

On September 27, 2019, the Company designated these two interest rate swaps as a cash flow hedge for the Company’s term loan under the credit facility agreement with Bank of Ayudhya Public Company Limited.

The combination of these two interest rate swaps qualified for hedge accounting because the hedges were highly effective, and the Company had

designated and documented contemporaneously the hedging relationships involving these interest rate swaps, one of which matured in June 2023.

While the Company intends to continue to meet the conditions for hedge accounting, if hedges do not qualify as highly effective, the changes in the fair value of the derivatives used as hedges would be reflected in earnings.

From September 27, 2019, any gains or losses related to these interest rate swaps are recorded in AOCI in the consolidated balance sheets.

The Company reclassifies a portion of the gains or losses from AOCI into earnings at each reporting period based on either the accrued interest amount or the interest payment.

As of June 28, 2024, there is no amount in AOCI that is expected to be reclassified into earnings within 12 months.

The following table provides a summary of the impact of derivative gain (loss) of the Company’s foreign currency forward contracts and interest rate swaps which were designated as cash flow hedges on the consolidated statements of operations and other comprehensive income:

3 unchanged sentences

Derivatives gain (loss) recognized in other comprehensive income (loss):

Foreign currency forward contracts Other comprehensive income $ 3,007 $ 1,142

Interest rate swaps Other comprehensive income ( 215 ) 1,302

Foreign currency forward contracts Other comprehensive income (loss) $ 5,075 $ 3,007

Interest rate swaps Other comprehensive income (loss) — ( 215 )

Total derivatives loss (gain) recognized in other comprehensive income $ 5,075 $ 2,792

17 unchanged sentences

Foreign currency forward contracts 1,658 ( 93 ) 15 ( 1,156 )

Interest rate swaps — — 215 —

Derivatives, gross balances 2,961 ( 105 ) 15 ( 2,244 )

2 unchanged sentences

Derivative Financial Instruments Balance Sheet line item

Fair Value of Derivative Assets Other current assets, Other non-current assets

Fair Value of Derivative Liabilities Accrued expenses, Other non-current liabilities

Fair Value of Derivative Assets Other non-current assets

Fair Value of Derivative Liabilities Accrued expenses

Trade accounts receivable, net

4 unchanged sentences

Trade accounts receivable, net $ 758,894 $ 592,452

The following tables summarize the movement in the Company’s expected credit losses during the years ended June 28, 2024 and June 30, 2023:

The following tables summarize the movement in the Company’s expected credit losses during the years ended June 27, 2025, June 28, 2024, and June 30, 2023:

(in thousands) Expected credit Losses

6 unchanged sentences

Balance as of June 28, 2024 1,629

Provision during the year 540

Reversal during the year ( 825 )

Balance as of June 27, 2025 $ 1,344

(in thousands) As of June 27,

10 unchanged sentences

None of the lease agreements contain residual value guarantees provided by the lessee.

The Company also has one intercompany lease transaction in the form of a lease of office and manufacturing space.

Operating leases

12 unchanged sentences

Weighted-average remaining lease term (in years) 5.5 5.6

Operating leases 5.6 1.2

Weighted-average discount rate 6.6 % 5.6 %

Operating leases 5.6 % 3.4 %

The following information represents supplemental disclosure for the statement of cash flows related to operating leases:

26 unchanged sentences

As of June 27, 2025, June 28, 2024 and June 30, 2023, the Company recognized impairment reserves for property, plant and equipment of $ 0.3 million, $ 0.3 million and $ 0.6 million, respectively.

During the year ended June 28, 2024, no borrowing costs capitalized, and during the year ended June 30, 2023, the Company had a de minimis amount of borrowing costs capitalized.

During year ended June 24, 2022, the Company had capitalized $ 0.9 million of borrowing cost.

The following tables present details of the Company’s intangibles:

(in thousands) Gross

Amount Accumulated

Amortization Net

As of June 28, 2024

Software $ 11,398 $ ( 9,077 ) $ 2,321

(in thousands) Gross

Amount Accumulated

Amortization Net

As of June 30, 2023

Software $ 10,533 $ ( 8,139 ) $ 2,394

(in thousands) As of June 27, 2025 As of June 28, 2024

Gross carrying amount $ 12,159 $ 11,398

Accumulated amortization ( 10,003 ) ( 9,077 )

Net $ 2,156 $ 2,321

The Company recorded amortization expense relating to intangibles of $ 0.9 million, $ 1.0 million and $ 1.3 million for the years ended June 27, 2025, June 28, 2024 and June 30, 2023, respectively.

5 unchanged sentences

Total $ 2,156

The Company’s total borrowings, including current and non-current portions of long-term borrowings, consisted of the following:

(in thousands of U.S.

Rate Conditions Maturity As of June 28, 2024 As of June 30, 2023

Long-term borrowings, current portion, net:

Term loan borrowings:

3-month LIBOR + 1.35 % per annum (1)

quarterly installments June 2024 $ — $ 12,188

Unamortized debt issuance costs, current portion — ( 32 )

Long-term borrowings, current portion, net $ — 12,156

(1) The Company entered into interest rate swaps that effectively fix a series of future interest payments on its term loans.

Refer to Note 7.

The movements of long-term borrowings were as follows for the years ended June 28, 2024 and June 30, 2023:

(in thousands) June 28,

2024 June 30,

Opening balance $ 12,188 $ 27,421

Repayments during the period ( 12,188 ) ( 15,233 )

Closing balance $ — $ 12,188

Credit facilities agreements:

On August 20, 2019, Fabrinet Thailand (the “Borrower”) and Bank of Ayudhya Public Company Limited (the “Bank”) entered into a credit facility agreement (the “2019 Credit Facility Agreement”), which provides for a facility of 110.0 million Thai baht (approximately $ 3.6 million based on the applicable exchange rate as of September 27, 2019) and $ 160.9 million that may be used for, among other things, an overdraft facility, short-term loans against promissory notes, a letter of guarantee facility, a term loan facility and foreign exchange facilities.

The Bank may approve any request for extension of credit under the 2019 Credit Facility Agreement and may increase or decrease any facility amount in its sole discretion.

Under the 2019 Credit Facility Agreement, on August 20, 2019, the Borrower and the Bank entered into a term loan agreement (the "Term Loan Agreement") pursuant to which the Borrower drew down on September 3, 2019 a term loan in the original principal amount of $ 60.9 million.

The proceeds from the term loan, together with cash on hand, were used to repay outstanding obligations under the Company's previous syndicated senior credit facility agreement.

The term loan accrues interest at 3-month LIBOR plus 1.35 % and is repayable in quarterly installments of $ 3.0 million, commencing on September 30, 2019.

On March 9, 2023, the Borrower and the Bank amended the Term Loan Agreement to replace the interest rate reference from LIBOR to the Secured Overnight Financing Rate ("SOFR") effective from September 29, 2023.

The term loan will mature on June 30, 2024.

The Borrower may prepay the term loan in whole or in part at any time without premium or penalty.

Any portion of the term loan repaid or prepaid may not be borrowed again.

During the year ended June 28, 2024, the Company recorded $ 0.3 million of interest expense in connection with this term loan, including the impact from interest rate swaps.

Any borrowings under the 2019 Credit Facility Agreement, including those borrowings under the Term Loan Agreement, are guaranteed by Fabrinet and secured by land and buildings owned by the Borrower in the Pathumthani and Chonburi Provinces in Thailand.

The Term Loan Agreement contains affirmative and negative covenants applicable to the Borrower, including delivery of financial statements and other information, compliance with laws, maintenance of insurance, and restrictions on granting security interests or liens on its assets, disposing of its assets, incurring indebtedness and making acquisitions.

While the term loan is outstanding, the Borrower is required to maintain a loan to value of the mortgaged real property ratio of not greater than 65 %.

If the loan to value ratio is not maintained, the Borrower will be required to provide additional security or prepay a portion of the term loan in order to restore the required ratio.

The Company is also

required to maintain a debt service coverage ratio of at least 1.25 times and a debt to equity ratio less than or equal to 1.0 times.

In the case of any payment of a dividend by the Company, its debt service coverage ratio must be at least 1.50 times.

The events of default under the Term Loan Agreement include failure to timely pay amounts due under the Term Loan Agreement or the related finance documents, failure to comply with the covenants under the Term Loan Agreement or the related finance documents, cross default with other indebtedness of the Borrower, events of bankruptcy or insolvency in respect of the Borrower, and the occurrence of any event or series of events that in the opinion of the Bank has or is reasonably likely to have a material adverse effect.

As of June 28, 2024, the term loan was fully repaid.

On March 9, 2023, Fabrinet Thailand and the Parent Company (the “Borrowers”) and the Bank entered into a credit facility agreement (the “2023 Credit Facility Agreement”), which provides a facility of $ 55.0 million.

Any borrowings under the 2023 Credit Facility Agreement are secured by land and buildings owned by the Borrowers in the Pathumthani and Chonburi Provinces in Thailand.

Under the 2023 Credit Facility Agreement, the Borrowers are required to maintain a loan to value of the mortgaged real property ratio of not greater than 60 %.

The Borrowers are also required to maintain a debt service coverage ratio of at least 1.25 times and a debt-to-equity ratio of less than or equal to 1.0 times.

In the case of any payment of a dividend by the Company, its debt service coverage ratio must be at least 1.50 times.

As of June 28, 2024, there was no amount outstanding under the 2023 Credit Facility Agreement.

As of June 28, 2024, the Company was in compliance with all of its financial covenants under the Term Loan Agreement.

Severance liabilities

10 unchanged sentences

Adjustment defined benefit obligation — ( 212 )

Foreign currency translation — 7

Balance, end of the fiscal year $ 31,225 $ 24,093

2 unchanged sentences

Adjustment plan assets — ( 349 )

Foreign currency translation — 11

Balance, end of the fiscal year $ — $ —

4 unchanged sentences

Total $ 31,225

The amount recognized in the consolidated balance sheets under non-current liabilities and non-current assets were determined as follows:

The amount recognized in the consolidated balance sheets under non-current liabilities was determined as follows:

(in thousands) As of June 27,

2025 As of June 28,

Non-current assets $ — $ 138

Non-current liabilities $ 31,225 $ 24,093

43 unchanged sentences

Upon termination of the 2010 Plan, 1,281,619 ordinary shares were reserved for issuance under the 2020 Plan pursuant to clause (ii) of the preceding sentence.

As of June 28, 2024, there were 306,660 restricted share units outstanding, 171,078 performance share units outstanding and 1,746,068 ordinary shares available for future grant under the 2020 Plan.

On November 2, 2017, the Company adopted the 2017 Inducement Equity Incentive Plan (the “2017 Inducement Plan”) with a reserve of 160,000 ordinary shares authorized for future issuance solely for the granting of inducement share options and equity awards to new employees.

The 2017 Inducement Plan was adopted without shareholder approval in reliance on the “employment inducement exemption” provided under the New York Stock Exchange Listed Company Manual.

As of June 28, 2024, there were no awards outstanding and 111,347 ordinary shares available for future grant under the 2017 Inducement Plan.

The 2020 Plan, 2010 Plan and 2017 Inducement Plan are collectively referred to as the “Equity Incentive Plans.”

The 2020 Plan and 2017 Inducement Plan are collectively referred to as the “Equity Incentive Plans.”

The following table summarizes the number of equity awards outstanding and ordinary shares available for grant under each of the Equity Incentive Plans as of June 27, 2025:

34 unchanged sentences

Vested ( 179,008 ) 70.05

Forfeited ( 61,765 ) $ 53.38

Balance as of June 30, 2023 204,016 $ 108.81

1 unchanged sentence

Vested ( 106,874 ) $ 101.05

Forfeited — $ —

Balance as of June 28, 2024 171,078 $ 135.31

1 unchanged sentence

Vested ( 97,142 ) 117.35

Forfeited — $ —

Balance as of June 27, 2025 120,916 $ 198.90

6 unchanged sentences

The payment was recorded as a reduction of additional paid-in capital.

Customer Warrant

On March 12, 2025, the Company issued a warrant (the “Warrant”) to Amazon.com NV Investment Holdings LLC to acquire up to 381,922 ordinary shares (the “Warrant Shares”) of the Company at an exercise price of $ 208.48 per share.

The Warrant allows for cashless exercise and expires on March 12, 2032.

Upon issuance of the Warrant, 38,192 of the Warrant Shares vested.

The remainder of the Warrant Shares are subject to vesting in multiple tranches over the term of the Warrant based on payments to the Company from or on behalf of Amazon.com, Inc.

("Amazon") or its affiliates under a commercial agreement or otherwise.

Upon the consummation of an acquisition transaction or the termination of the commercial agreement by Amazon for cause, the unvested portion of the Warrant will vest in full.

The exercise price and the number of Warrant Shares are subject to customary antidilution adjustments.

Using the Black-Scholes option pricing model, the grant date fair value of the Warrant was determined to be $ 102.88 per share, for a total fair value of $ 39.3 million.

The grant date fair value of the Warrant was estimated as of the issuance date using the following assumptions:

Expected dividend yield —

Risk-free interest rate 3.8 %

Expected volatility 45.2 %

Expected term (in years) 7 years

Employee benefit plans

13 unchanged sentences

For the years ended June 27, 2025 and June 28, 2024, the Company maintained an executive incentive plan with quantitative objectives, based on achieving certain revenue and non-U.S.

GAAP operating margin or gross margin

GAAP operating margin or gross margin targets.

During the years ended June 27, 2025, June 28, 2024 and June 30, 2023, discretionary merit-based bonus awards were also available to Fabrinet’s non-executive employees.

9 unchanged sentences

In August 2017, the Company’s board of directors approved a share repurchase program to permit the Company to repurchase up to $ 30.0 million worth of its issued and outstanding ordinary shares in the open market in accordance with applicable rules and regulations.

In February 2018, May 2019, August 2020, August 2022, and August 2023, the Company’s board of directors approved an increase of $ 30.0 million, $ 50.0 million, $ 58.5 million, $ 78.7 million, and $ 47.6 million, respectively, to the original share repurchase authorization, bringing the aggregate authorization to $ 294.8 million.

In February 2018, May 2019, August 2020, August 2022, August 2023, August 2024, and January 2025, the Company’s board of directors approved an increase of $ 30.0 million, $ 50.0 million, $ 58.5 million, $ 78.7 million, $ 47.6 million, $ 139.5 million, and $ 100.0 million, respectively, to the original share repurchase authorization, bringing the aggregate authorization to $ 534.3 million.

During the year ended June 27, 2025, the Company repurchased 561,858 shares under the program at an average price per share (excluding other direct costs) of $ 223.76 , totaling $ 125.7 million.

46 unchanged sentences

Capital expenditure

In February 2025, the Company entered into a construction contract with a local contractor for construction of a new

manufacturing building at the Company's Chonburi campus.

The contract price is approximately $ 132.5 million (Thai baht 4.45 billion).

As of June 27, 2025, the Company had total capital expenditure commitments to third parties of $ 201.3 million.

4 unchanged sentences

Fabrinet maintains a director and officer liability insurance policy that may enable it to recover a portion of any future amounts paid under the indemnification agreements.

Credit facility agreement

On March 9, 2023, Fabrinet Thailand and the Parent Company (collectively, the “Borrowers”) and the Bank of Ayudhya Public Company Limited (the "Bank") entered into a credit facility agreement (the “2023 Credit Facility Agreement”), which provided a facility of $ 55.0 million.

During the three months ended December 27, 2024, the Borrowers and the Bank amended the 2023 Credit Facility Agreement to reduce the facility to $ 30.0 million, which may be used for, among other things, an overdraft facility.

As of June 27, 2025, there was no amount outstanding under the 2023 Credit Facility Agreement.

Under the 2023 Credit Facility Agreement, the Borrowers are required to maintain a debt-to-equity ratio of less than or equal to 1.5 times for Fabrinet Thailand and 1.0 times for the Parent Company.

As of June 27, 2025, the Borrowers were in compliance with all of their financial covenants under the 2023 Credit Facility Agreement.

Litigation and claim

On June 28, 2024, Ngan In Leng and First Laser Limited (collectively, the “Plaintiffs”) filed a complaint in the Fuzhou

Intermediate People’s Court (the “Court”) in Fuzhou, China against Fujian Enterprises (Holdings) Co., Ltd.

On June 28, 2024, Ngan In Leng and First Laser Limited (collectively, the “Plaintiffs”) filed a complaint in the Fuzhou Intermediate People’s Court (the “Court”) in Fuzhou, China against Fujian Enterprises (Holdings) Co., Ltd.

(“FEHC”), Jian An Investment Limited (“Jian”), and Casix, Inc.

2 unchanged sentences

The Plaintiffs have requested that the Court order FEHC to return the unjust enrichment to the Plaintiffs in the amount of RMB 400 million, with interest from March 1, 2000, and order Jian and Casix to bear joint and several liability for all payment obligations of FEHC.

At this time, the Company is not able to quantify any potential liability in connection with this litigation because the case is in its early stages.

In September 2024, the Court dismissed the lawsuit in its entirety based on jurisdictional grounds.

The Plaintiffs have since appealed the Court’s ruling to the High People's Court of Fujian Province (the "Appellate Court").

In their appeal, the Plaintiffs now claim that Casix is the primary obligor to return the alleged unjust enrichment to the Plaintiffs.

On November 24, 2024, the Appellate Court agreed to hear the appeal.

At this time, the Company is not able to quantify any potential liability in connection with this litigation because of the early stage of this litigation.

Restructuring and other related costs

Restructuring and other related costs may consist of severance-related charges, asset-related charges and other costs due to exit activities.

In January 2025, the Company implemented a restructuring initiative aimed at enhancing operational effectiveness and streamlining activities within its subsidiary located in Thailand.

As a result of the restructuring, the Company incurred total charges of $ 1.4 million, which were primarily related to employee severance and other termination benefits.

These severance-related charges reflect the costs associated with workforce reductions across various functions within the Thailand operations.

The restructuring charges have been recognized in the consolidated statements of operations within "Restructuring and other related costs" for the year ended June 27, 2025.

The Company recognizes severance-related charges depending on whether the termination benefits are provided under an ongoing benefit arrangement or under a one-time benefit arrangement.

The Company recognizes the charges once the benefits have been communicated to employees.

As of June 27, 2025, there was no restructuring liability balance.

Business segments and geographic information

Operating segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (the “CODM”) in deciding how to allocate resources and in assessing performance.

The Company’s CODM is Fabrinet’s Chief Executive Officer.

As of June 28, 2024, June 30, 2023 and June 24, 2022, the Company operated and internally managed a single operating segment.

Accordingly, the Company does not accumulate discrete financial information with respect to separate product lines and does not have separate reportable segments.

The Company manages its business activities on a consolidated basis and operates as a single operating segment.

The Company’s chief operating decision maker (“CODM”) is Fabrinet’s Chief Executive Officer.

The CODM utilizes GAAP and non-GAAP measures of profit and loss to evaluate the Company’s financial performance, allocate resources, make key operating decisions, and compare actual results to forecasts.

Further, the CODM reviews and utilizes functional expenses (cost of revenue, and selling, general and administrative expenses) at the consolidated level to manage the Company’s operations.

Other items included in GAAP and non-GAAP net income are interest income, other income (expense), net and income tax expense, which are reflected in the consolidated statements of operations and comprehensive income.

The measure of segment assets is reported on the consolidated balance sheets as total assets, although the CODM does not evaluate asset information for purposes of allocating resources or evaluating performance.

The following table provides information about the Company's revenue, significant segment expenses and other segment expenses:

(in thousands of U.S.

dollars, except per share data) June 27, 2025 June 28, 2024 June 30, 2023

Revenues $ 3,419,327 $ 2,882,967 $ 2,645,237

Cost of revenues ( 3,005,978 ) ( 2,526,849 ) ( 2,308,964 )

Gross profit 413,349 356,118 336,273

Selling, general and administrative expenses ( 87,466 ) ( 78,481 ) ( 77,673 )

Restructuring and other related costs ( 1,436 ) ( 32 ) ( 6,896 )

Operating income 324,447 277,605 251,704

Interest income 40,162 33,204 11,234

Interest expense — ( 124 ) ( 1,472 )

Foreign exchange gain (loss), net ( 9,251 ) 382 ( 1,211 )

Other income (expense), net ( 178 ) 287 ( 159 )

Income before income taxes 355,180 311,354 260,096

Income tax expense ( 22,653 ) ( 15,173 ) ( 12,183 )

Net income 332,527 296,181 247,913

For the Company’s revenues by geographic region, see “Revenue by Geographic Area and End Market” in Note 3.

24 unchanged sentences

NVIDIA Corporation 25.5 % 22.7 %

Infinera Corporation 19.3 % 20.5 %

Cisco Systems, Inc.

Lumentum Operations LLC * 13.7 %

13.7 % 12.4 %

Nokia Corporation (1)

12.0 % 19.3 %

* Represents less than 10% of total accounts receivable.

(1) Includes Infinera Corporation as of June 27, 2025.

Financial instruments

11 unchanged sentences

The Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the Thai baht, RMB and GBP.

Interest Rate Risk

The Company’s principal interest bearing assets are time deposits and short-term investments with maturities of three years or less held with high quality financial institutions.

The Company’s principal interest bearing liabilities are bank loans which bear interest at floating rates.

The Company entered into interest rate swap agreements (the “Swap Agreements”) to manage this risk and increase the profile of the Company’s debt obligation.

The terms of the Swap Agreements allow the Company to effectively convert the floating interest rate to a fixed interest rate.

This locks the variable in interest expenses associated with our floating rate borrowings and results in fixed interest expenses, which is unsusceptible to market rate increase.

The Company designated the Swap Agreements as a cash flow hedge, and they qualify for hedge accounting because the hedges are highly effective.

While the Company intend to continue to meet the conditions for hedge accounting, if hedges do not qualify as highly effective, the changes in the fair value of the derivatives used as hedges would be reflected in our earnings.

From September 27, 2019, any gains or losses related to these outstanding interest rate swaps will be recorded in accumulated other comprehensive income in the consolidated balance sheets, with subsequent reclassification to interest expense when settled.

Subsequent Event

In August 2024, the Company’s board of directors approved the repurchase of up to an additional $ 139.5 million of the Company’s outstanding ordinary shares, bringing the aggregate authorization under the Company’s existing share repurchase program to $ 434.3 million, with $ 200.0 million currently remaining.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data